Market hanging on to uptrend; sentiment neutral
The market has spent the last three weeks basically going sideways within a still-intact intermediate-term uptrend. A break below key near-term support at ~1250-1260 (S&P 500) and ~11,300 (DJIA) would suggest a high probability of a retest of the July lows.
Sentiment levels as measured by the equity-only put/call ratio appear basically neutral here after coming down from levels indicating extreme pessimism (which is bullish) near the market’s July lows. So far at least they haven’t reached levels indicating any extreme optimism during the current uptrend, which could be interpreted positively. And if the market does break down from here, they could potentially move back up to pessimistic (i.e., bullish) extremes fairly quickly.
New positions
No new positions were added this week (but not for lack of trying).
Watchlists
The following stocks showed up on this week’s “upside strength” scans of stocks of interest, suggesting that they may be headed higher and may represent good buying opportunities on weakness: Leggett & Platt (LEG), Pinnacle West Capital (PNW), and Plum Creek Timber (PCL).
The following stocks showed up on this week’s “oversold” scans of beaten-down stocks of interest, suggesting that likely further near-term weakness may represent a buying opportunity: AMB Property (AMB), Barclays (BCS), Canadian Imperial Bank of Commerce (CM), Canon (CAJ), Emerson Electric (EMR), Energy Transfer Equity, L.P. (ETE), Hospitality Properties Trust (HPT), Nam Tai Electronics (NTE), and Unilever NV (UN).
