The SPXA150R is used as a Short-Term Market Signal (reference this page for additional information). When price moves above 80, the market rally is becoming extended. At 85+ the bulls are definitely in rally mode but the markets are beginning to top out. At 90+, the markets are at a peak and a pull back is expected. At 89.20, this is close enough for government work, and a peak in the broad indexes is expected any day forward, say within a couple weeks time. For the May top, the SPXA150R continued above 90+ for about two weeks after the 90 level was breached, and this created another 50 handles in the SPX as that euphoric rally played out. Since a 20 or 30 or more point move may occur intraday for the SPX in these volatile markets, and the 1680 level was taken out, a move to 1720's cannot be ruled out before the peak occurs and the downside begins.
The low CPC and CPCE put/calls are also indicating complacency and complete lack of fear in the markets due to the Fed supplying crack cocaine easy money every day. Traders are not worried at all about any downside occurring and that is typically when it occurs. The SPX may run above 1700 in the coming days but the SPXA150R says it is prudent to have shorts on currently. As a scale-in approach for the most bullish traders, think about scaling back longs and bringing on shorts each day forward. This will provide some leeway if the SPXA150R decides to run a few points above 90 which would correspond to SPX 1700-1730. In a broader context, note that the SPXA150R is not at the May levels but the SPX has created new all-time highs printing above the May numbers. This divergence is viewed negatively since as the broad equity markets make new highs, less and less stocks are above their 150-day MA's. In a robust market you would expect more like the spring time.
Projection is for the broad indexes to top now and roll over at any day forward, say, within a couple weeks time overall. The SPXA150R peaked on 5/20/13 and 5/21/13 at 94.40. The next day, 5/22/13, was the top in the SPX at 1687 and this was over a 30-handle intraday downside move. Watch your wallet moving forward. A move above 90+, here and higher, is a very comfortable place to short the market. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.