Daily update 10/26 SPY option data

Another volatile day. 

Another high volume day.  Breadth was -70%.  New highs were 11.  New lows spiked up to 511.  There was a big rally mid day, but then another sell off in the afternoon.  SPX ended well off the low, but still below the open. 

The futures are oversold.  What else is there to say?

The red count is back into oversold.  The intermediate indicator has not been this low since the late 2015 and early 2016 sell offs.  You have to go back to 2011 for next occurrence. 

It looks like the market is in the top four oversold conditions since the 2009 rebound.  One major difference this time is the FED is doing QT.  They are now doing $50 billion a month.  It is clearly having an affect world wide.  The price action looks like traders are trying to catch an oversold bottom, but many money managers are still looking to sell.  There does not seem to be any panic in the air that I can detect.  TRIN was low once again.  We have only had one day with the TRIN over 2.  In Feb. and in the 2015 and 2016 pullbacks there was at least one reading over 3.  So do we have enough fear to make a bottom yet?  Beats me.  I have no idea what is going to happen on Monday.  Bad weeks in late Oct. have been followed by crash Mondays or big rally days.  Buckle your seat belt.

Here is a look at Nov. options.

It looks like there is a lot of put support at 265.  That may be helpful for making a bottom here.  The next level down would be 260, but it is not as strong.  There is no call option resistance in sight.  SPY closed above 265 today after multiple dips below it.  Will this option support be strong enough to make a short term bottom?  If the market heads south again on Monday we could see delta hedge selling accelerate the downside.  How we open on Monday could be very important.

 
Have a great weekend.

Bob