We’ve seen a little red to kick off this week — and, honestly, I’m not mad about it…
After a strong run, the market needs to cool off.
One of the tools I always keep an eye on during moments like this is the CPC — the CBOE’s put-call ratio. When that reading drops below 0.75, it usually means the bulls are getting a little too greedy and we’re due for a breather. That’s exactly what we saw late last week.
But here’s the thing…
Even as the CPC hit that overheated level, it snapped back fast. That quick bounce tells me the downside fear is getting priced in quickly, which usually leads to a healthy base — not a major pullback.
Translation? I’m not seeing signs of a market crash here, just a normal exhale after a sprint.
Now layer that with the margin debt data, which is one of my favorite under-the-hood indicators. Every time this margin debt reading hits an extreme high, markets tend to top out shortly after.
But we’re not there right now — not even close. In fact, we’re closer to the “green zone,” which has historically aligned with bottoms and fresh uptrends. That’s another reason I’m staying bullish.
And remember the Moody’s credit downgrade? Everyone panicked — but if you look back at past downgrades (2011, 2023), the market rallied 12 months later both times.
It’s just another layer of noise that gets absorbed by the bigger picture.
So yeah, we might drift or chop a bit from here. But with the CPC resetting and margin debt in a good spot, I’m not backing off this thesis…
I think we hit new all-time highs by June.
You just gotta let the engine cool before the next leg higher.
Philip Morris International (PM) In Bullish Mode
Alright, so Newton just triggered a fresh bullish signal on Philip Morris (PM), and I think it’s worth a closer look.
This stock doesn’t get a lot of hype, but it’s been quietly trending higher—and with the market taking a breather, this could give us a nice little edge. Staples tend to hold up better when things get choppy, and PM’s momentum just picked up on the scanner.
That’s a combo I like.
This isn’t a moonshot. It’s just a clean, efficient setup with high odds and low risk. The Newton Indicator is green, the trend’s intact, and I like having a name like this in the mix while the broader market cools off a bit.
Chevron Corp (CVX) Looking Bearish
Chevron (CVX) has been flashing some bearish signals lately — and the setup is starting to make more sense.
While energy stocks can be solid performers in the right environment, CVX has been lagging behind. The broader energy sector has struggled to gain traction, and with oil prices softening and capital expenditures tightening across the board, Chevron’s chart is showing signs of fatigue.
Our Newton Indicator just lost momentum on CVX, and that’s a red flag in this kind of tape.
Now, I’m not saying CVX is headed off a cliff — but I am saying it’s not where I want my money right now. The trend is weak, the momentum’s cooled, and there are better spots to look for bullish setups. In this kind of market, I want to be aligned with strength… not trying to guess when a laggard like CVX might wake back up.
Until we see a confirmed shift, I’ll be sitting this one out.
Graham Lindman
Graham Lindman Trading
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