A number of bearish signals have arisen over the past two weeks, and the market has declined -- albeit only slightly. The bears have not really capitalized on what have been favorable technicals. That doesn't mean they still can't, but the broad market has weathered the storm fairly well. The down trend line in $SPX remains intact, and there is resistance at 1330.
Equity-only put-call ratios turned decisively bearish during the last week also, as they are now rising steadily.
However, market breadth indicators have now registered a buy signal.
Volatility indices ($VIX and $VXO) gave a short-term buy signal on Monday, after $VIX spiked up to 20 and then right back down again.
In summary, the $SPX chart is negative as are the put-call ratios, while breadth and $VIX are on buy signals. This oversold rally could propel $SPX towards 1340, but unless it can break out over that level, the bearish downtrend remains in effect.
Sign up for The Option Strategist Weekly Updater to receive this market commentary delivered to your inbox each Friday for free.