By Lawrence G. McMillan
The island reversal gap on the $SPX chart was finally filled, at 2750, this past week. That moves the $SPX chart out of "bearish" status, but it is still badly lagging indices that have recently made new all-time highs, such as the NASDAQ Composite and the Russell 2000. Even so, this is a big improvement, for all of the other indicators have retained their bullish status as well.
There is now resistance/targets at 2800 and 2870 (the $SPX all-time highs). Support is at 2740, 2700, and at various levels below that.
Equity-only put-call ratios continue to decline, and thus they remain on buy signals, as does the Total put-call ratio.
Market breadth oscillators remain on buy signals. Furthermore, the cumulative advance-decline lines for both "stocks only" and NYSE-based data have been making repeated new all-time highs.
Finally, volatility remains in a bullish state for stocks. In fact, one might say that $VIX is getting overbought once again.
In summary, the various indicators have remained bullish and now the $SPX chart is making steps towards joining the crowd. There have been some news-oriented declines in recent days, but the technical factors still remain very strong.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.
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