- The market is no longer oversold although it is not yet overbought either.
- Seasonality is positive through the end of this week and then turns slightly negative next week.
- Sentiment surveys are not showing extreme bearishness, but are showing too much bearishness.
- The put/call ratios have been showing a lot of activity in puts, except for a few scattered days of call buying.
- Rydex traders have backed off their bullish bets but have not increased bearish bets to a large degree.
It is disappointing that the bulls have been able to do so little with the oversold reading they had. That said, I am still inclined to give the bulls the benefit of the doubt for the balance of this week. Seasonality is strong, there is too much bearishness and we are not yet overbought.