The following Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.
On Tuesday of this week, $SPX broke out strongly to the upside. This was a clear sign that the bulls are in control, and -- despite some divergences and overbought conditions -- this market is just plain strong right now. The upside breakout left a very well-confirmed support area in its wake: 1130-1150.
The equity-only put-call ratios are bullish as well. Market breadth has been the most skittish of indicators, but overall breadth is bullish.
Volatility indices ($VIX and $VXO) remain in downtrends (or at least are not in uptrends) and that is supportive of the intermediate- term bullish case as well.
In summary, with this $SPX upside breakout over 1150, the bulls are in charge and will remain that way until there is a breakdown in the chart of $SPX itself.