By Lawrence G. McMillan
The market tried to break down this week, as $SPX finally pushed through the lower end of the very tight 2160-2175 trading range that had held it in check since mid-July. However, that feint downward was short-lived, and $SPX crawled right back up into the trading range once again. As a result, the $SPX chart remains bullish.
The major support area is 2120-2135, the top of the trading range that had held $SPX back from making new highs for over a year.
Equity-only put-call ratios wavered early this week, as they rose for a couple of days. But now they are making new relative lows. Thus, they both remain on buy signals.
Market breadth, which has been quite strong for a couple of months now, finally faltered, but then recovered. Both breadth oscillators are thus clinging to buy signals.
Volatility indices have remained at low levels and thus continue to remain in a bullish mode for stocks. As long as $VIX meanders sideways to lower, stocks can rise.
In summary, there are no sell signals among our indicators at this time. Hence we remain bullish for the short term.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.
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