Weekly Stock Market Commentary 4/12/13

By Lawrence G. McMillan

The broad stock market, as measured by the Standard and Poors 500 Index ($SPX) continues to make new highs almost every day. $SPX finally moved above its 2007 intraday highs, and so it (and the Dow $DJX) are trading at prices never seen before.

$SPX clearly established 1540 as a major support level, as it has rallied strongly and sharply off that level twice in the last month.

Equity-only put-call ratios continue to be heavily distorted by protective put buying.

Breadth has been positive enough in the last few days (since the major $SPX upward reversal last Friday morning, after the Unemployment Report), to return the breadth indicators to buy signals.

Volatility indices ($VIX and $VXO) have painted a bullish picture as well. $VIX once again has remained bullish by constantly closing below 14.

For now, we remain bullish as long as the chart of $SPX is bullish.  At a minimum, it would have to close below 1560 to create some doubt on its chart.

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