Each month, I like to do a market overview and see where the market might be headed. Although there are many frightening predictions, the indicators are actually looking pretty good. Here’s a brief list (which comes from my book, All About Market Indicators (McGraw-Hill, 2011).
AAII Survey: 40% bullish, which is neutral). Note: Over 60% bullish is a sell.
Investor’s Intelligence: 39.3% bullish, which is neutral. Note: Over 50% bullish is a sell.
Put/Call Ratio: .60 (This indicates more calls are being bought, which is slightly bearish (contrary indicator))
ISEE: 176, which is neutral. Note: Over 250 is a sell signal.
VIX: 15.35, which indicates calm among call and put buyers and sellers. Note: Under 12 is a sell signal.
New High-New Low: New highs are expanding, which is a positive sign.
Advance-Decline Line: Rising, which is positive.
Moving Average: The S&P 500 is above the 200-day MA, which is a positive sign.
According to the above indicators, the market signs are positive. Obviously, there could be short-term volatility because of the fiscal cliff negotiations.