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By Lawrence G. McMillan

The Standard and Poors 500 Index ($SPX) is hovering near 1260 once again.  What makes this significant is that this is the area not only of the 200-day moving average of the index, but it is also the point where the index meets the downtrend line connecting the recent market tops. A close above 1270 would be a clear upside breakout.

Both the standard equity-only put-call ratio and the weighted ratio are on buy signals.

Breadth (advances minus declines) has been less supportive.  This indicator is now on a sell signal.      

$VIX has been in a steady decline since October.  At face value, this is quite bullish, for the stock market and $VIX tend to trend in opposite directions.      

To summarize this short-term outlook, then: the bulls have everything going their way.  If they can't get the clear upside breakout soon, that would be very bearish.

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