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By Lawrence G. McMillan

The chart of $SPX has developed a very interesting characteristic: there is a rising channel -- called a "pennant"  on the chart.  A breakdown below the lower boundary of the channel creates a very negative technical formation.      

Equity-only put-call ratios, meanwhile, are quite bullish.  They rolled over to buy signals last week and continue to decline.      

Volatility indices ($VIX and $VXO) have been stubbornly staying at high levels.  There was a spike peak buy signal again this week.      

In summary, the buy signals from put-call ratios and $VIX offer a positive short-term picture, but there are other negative factors present as well -- the most dangerous of which would be breakdown below 1140, violating the lower end of the channel. 

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