background image

Hertler Market Signal Update #952 

12/20/2020

                    1

Hertler Market Signal Update

#952 December 20, 2020

The SMI, LMC and EMC are bullish. Sentiment indicators are mixed.

1500

2000

2500

3000

3500

4000

-10000

-8000

-6000

-4000

-2000

0

2000

2/1/15

2/1/16

2/1/17

2/1/18

2/1/19

2/1/20

2/1/21

S

S

m

a

rt

M

on

e

y

In

d

e

x

(S

M

I)

S&P 500 vs Smart  Money Index

©2020 Hertler Market Signal.com.
www. hertlermarketsignal.com

___SMI 50-DMA

___SMI 200-DMA

The Smart Money slipped to a new low The SMI has been trending inversely to the S&P. 

So, the SMI remains bullish.


background image

Hertler Market Signal Update #952 

12/20/2020

                    2

1500

2000

2500

3000

3500

4000

-3500

-3000

-2500

-2000

-1500

-1000

-500

0

500

2/1/15

2/1/16

2/1/17

2/1/18

2/1/19

2/1/20

2/1/21

S

©2020 Hertler Market Signal.com.
www. hertlermarketsignal.com

S&P 500 vs LMC

L

M

C

(C

u

m

u

la

tiv

e

L

a

te

M

a

rk

e

tC

o

m

p

on

e

nt

o

f

S

M

I)

___LMC 50-DMA

___LMC 200-DMA

The late market component (LMC) of the Smart Money Index was little changed last 

week and is just above its low. The LMC has been trending opposite the S&P 500. The LMC is 
bullish.


background image

Hertler Market Signal Update #952 

12/20/2020

                    3

1500

2000

2500

3000

3500

4000

6000

8000

10000

12000

14000

16000

18000

2/1/15

2/1/16

2/1/17

2/1/18

2/1/19

2/1/20

2/1/21

S

©2020 Hertler Market Signal.com.
www. hertlermarketsignal.com

E

M

C

(C

um

u

la

tiv

e

E

a

rly

M

a

rk

e

t

C

o

m

p

on

e

nt

o

f

S

M

I)

___EMC 50-DMA

___EMC 200-DMA

S&P 500 vs EMC

The EMC (early market component of the SMI) was nearly unchanged at its high.  

Although in theory the EMC is supposed to represent the dumb money – the emotional traders – 
it is apparent that the EMC has been correlated well with the S&P. The EMC is bullish.


background image

Hertler Market Signal Update #952 

12/20/2020

                    4

800

1000

1200

1400

1600

1800

2000

0.045

0.05

0.055

0.06

0.065

0.07

0.075

2/1/15

2/1/16

2/1/17

2/1/18

2/1/19

2/1/20

2/1/21

R

©2020 Hertler Market Signal.c om.
www. hertlermarketsignal.com

R

at

io

o

f

R

u

ss

e

ll2

0

0

0

to

D

JIA

Small Caps vs  Ratio of Russell 2000 Small Caps to  DJIA

The small cap/DJIA ratio has been in a down-trend for over 3 years. It surged to a new 

high in the uptrend that began on March 18, 2020. It is bullish.


background image

Hertler Market Signal Update #952 

12/20/2020

                    5

4000

6000

8000

10000

12000

14000

2.2

2.4

2.6

2.8

3

3.2

3.4

3.6

2/1/15

2/1/16

2/1/17

2/1/18

2/1/19

2/1/20

2/1/21

N

©2020 Hertler Market Signal.c om.
www. hertlermarketsignal.com

R

at

io

o

f

N

A

S

D

A

Q

C

o

m

p

os

ite

to

S

&

P

5

00

NASDAQ Comp vs Ratio of NASDAQ Comp. to S&P 500

The ratio of the NASDAQ Composite to the S&P surged to a new high above its short 

term rising channel. It is bullish.


background image

Hertler Market Signal Update #952 

12/20/2020

                    6

8000

9000

10000

11000

12000

13000

14000

15000

0

20

40

60

80

100

120

2/1/15

2/1/16

2/1/17

2/1/18

2/1/19

2/1/20

2/1/21

N

©2020 Hertler Market Signal.com.
www. hertlermarketsignal.com

F

e

a

r

In

d

e

x:

P

ro

d

u

ct

o

f

V

IX

O

an

d

T

ot

al

P

u

t/C

a

ll

R

at

io

(5

0

-D

ay

M

ov

in

g

A

ve

ra

g

e

)

NYSE Composite vs Fear Index

___Fear 5-DMA

The Fear Index 5-day moving average turned up from a low last week, but the 50-DMA is 

continuing to fall. 


background image

Hertler Market Signal Update #952 

12/20/2020

                    7

8000

9000

10000

11000

12000

13000

14000

15000

0

0.5

1

1.5

2

2.5

3

3.5

4

2/1/15

2/1/16

2/1/17

2/1/18

2/1/19

2/1/20

2/1/21

N

©2020 Hertler Market Signal.c om.
www. hertlermarketsignal.com

NYSE Composite vs Optimism Index

O

p

tim

is

m

In

d

e

x

(O

E

X

15

-D

ay

P

ut

/C

all

d

iv

id

e

d

b

y

R

ela

tiv

e

V

X

O

)

The Optimism Index fell last week. But, it remains far below past major peaks of 

optimism. Highs in the Optimism Index often occur prior to stock market highs. Lows occur at 
market lows. 


background image

Hertler Market Signal Update #952 

12/20/2020

                    8

1500

2000

2500

3000

3500

4000

0

0.5

1

1.4

2

2.5

3

3.5

2/1/15

2/1/16

2/1/17

2/1/18

2/1/19

2/1/20

2/1/21

S

©2020 Hertler Market Signal.c om.
www. hertlermarketsignal.com

S&P 500 vs S&P 100 Option 15-Day Put/Call Ratio

The "smart money" OEX Put/Call Ratio is
Bearish above 1.4 and Bullish below 1.0.

C

B

O

E

S

&

P

1

0

0

O

p

tio

n

P

u

t/C

all

R

at

io

(1

5-

D

a

y

M

o

vin

g

A

ve

ra

g

e)

The smart money OEX put/call ratio has fluctuated in a range that can be defined as 

bearish above 1.4 and bullish below 1.0. It fell further below 1.0 and is bullish.


background image

Hertler Market Signal Update #952 

12/20/2020

                    9

2400

2600

2800

3000

3200

3400

3600

3800

0.4

0.5

0.6

0.7

0.8

0.9

1

1.1

1.2

4/1/20

7/1/20

10/1/20

1/1/21

S

E

q

uit

y

P

ut

/C

all

©2020 Hertler Market Signal.c om.
www. hertlermarketsignal.com

S&P 500 vs Equity Put/Call Ratio

Recent low in the equity put/call ratio is lower than recent values that marked S&P 500 

highs.


background image

Hertler Market Signal Update #952 

12/20/2020

                    10

5000

10000

15000

20000

25000

30000

35000

0

1

2

3

4

5

6

7

3/1/00

3/1/04

3/1/08

3/1/12

3/1/16

3/1/20

D

10/2008

8/2011

©2020 Hertler Market Signal.c om.
www. hertlermarketsignal.com

ID

V

(In

te

rd

a

y

V

o

la

tili

ty

o

f

D

JI

A

,%

)

1

0

-D

ay

M

ov

in

g

A

vg

.

DJIA vs Interday Volatility of DJIA

The 10-Day Interday Volatility remains low. Maxima often correspond to market lows and 

vice versa.


background image

Hertler Market Signal Update #952 

12/20/2020

                    11

5000

10000

15000

20000

25000

30000

35000

0

2

4

6

8

10

3/1/00

3/1/04

3/1/08

3/1/12

3/1/16

3/1/20

D

10/2008

8/2011

©2020 Hertler Market Signal.c om.
www. hertlermarketsignal.com

ID

V

(In

tra

da

y

V

o

la

tili

ty

o

f

D

JI

A

,%

)

1

0

-D

ay

M

ov

in

g

A

vg

.

DJIA vs Intraday Volatility of DJIA

The 10-day Intraday volatility has been was little changed last week and remains low.


background image

Hertler Market Signal Update #952 

12/20/2020

                    12

2200

2400

2600

2800

3000

3200

3400

3600

3800

-30

-20

-10

0

10

20

30

40

50

2/1/17

8/1/17

2/1/18

8/1/18

2/1/19

8/1/19

2/1/20

8/1/20

2/1/21

S

©2020 Hertler Market Signal.com.
www. hertlermarketsignal.com

S&P 500 vs AAII Member Bulls Minus Bears

A

A

II

B

u

ll-B

ea

r

The AAII member bulls minus bears fell last week but remains very high.  It is bearish.

-----------