Market technicals and sentiment; and options spread suggestion

I posted not only technical analysis info but also sentiment indicators charts today, including at my UBTNB3 site under the "Charts roundup" label. The technicals confirm what we already know, that support for the rally has been weakening into the key Fibonacci levels we presented regarding the 833 level (with 838 as a backup but not needed for the setup). Sentiment is measured different ways, and the charts I posted there seems to have some conflicting aspects. But in general, it looks to me like sentiment is still relatively bullish (which is bearish). Check out the Monday Morning Outlook at Schaeffers which readers know I recommend - you can check it out each Monday morning, using the link at the right side of this page. To make it easier for you, here's a link to that article this morning: http://www.schaeffersresearch.com/commentary/observations.aspx?ID=92098&obspage=1

And here is a "credit spread" or options spread discussion including a specific setup involving options on PG, that does look pretty good as far as I can tell: http://www.schaeffersresearch.com/commentary/content/credit+spread+corner/observations.aspx?id=92116. Apparently this is going to be a new column at Schaeffers so you might want to keep up with it from time to time if options spreads are your thing.

Tony Caldaro has revised his short-term Elliott Wave count, recognizing that diagonal wedge that looked like it formed last week in the SPX. Based on his view, we're now seeing part of a pullback wave B. From my corner, I'm going to remain skeptical (pessimistic) backstopped against 833 and will see. I also posted the max pain info from that "max pain" website I recently added to the other sites of interest listed at the right side of the page here (I posted it at the UBTNB3 site, you can also find that link at right). For SPY, it calculated 70 as the new "max pain" level. Remember, this calculated max pain level can change relatively rapidly. and so I do not know that I can recommend it this far in advance of the April opex. For that matter, I wouldn't rely upon this signal alone - but it is noteworthy, IMO, that it has dropped to 70.

That Fibonacci cluster I've mentioned with a probable reversal zone from 806-833 is called the "triple crown" in that book by Hobbs, Fibonacci for the Active Trader. On the one hand, no setup is ever a guarantee so I won't pretend that it is. On the other, it's one of the more robust setups in the sense that its first objective goes relatively far; in this case, it would point toward a new low at a minimum price that's 1.272 of the range from 667 to 833 - in this case, to 621.85. (At that point, one would take partial profits, tighten the stop on the rest, and expect yet lower prices after that.) This setup is, therefore, squarely in conflict with at least two prevailing Elliott Wave views of the market (maybe three), which call for the market to rally higher in the days to weeks ahead.

So as always, be careful out there, and happy trading!