While not infallible, this Stock Market option sentiment gauge (OBSG) by Market Harmonics often provides warning of an overbought conditions at recent levels that sets up the market for a news trigger sending prices lower short to medium term. This metric looks at the relative strength trend of option trading sentiment.

 

For short term timers, moving below the July 17th lows will increase the odds of a sharper drop by the end of this weeks inflection point with a maximum of 2740’s basis September S&P.

Moving above the July 18th high implies a further assault on the record January highs into the 2850 – 2900 zone basis.Sept’ S&P.

Strong earnings season is still the consensus into 1st half of August.

Overall 2018 sideways pattern remains in place.