By Lawrence G. McMillan
From mid-morning just two weeks ago (October 9th) through Tuesday's close, the Standard & Poors 500 Index ($SPX) rose 115 points. That is impressive, but the advance has been so swift that it has created a number of overbought conditions that are on the brink of becoming sell signals. $SPX has support at 1730 and 1700.
Equity-only put-call ratios have rolled over to buy signals.
Market breadth has been very strong, and both breadth indicators are on buy signals. However, they are also in deeply overbought territory.
Volatility indices ($VIX and $VXO) plunged from their highs of two weeks ago. They are now so low that they can be considered another overbought indicator for stocks.
In summary, the indicators are bullish for the intermediate term, but the overbought condition of the market indicators means that another short-lived pullback is likely.
Sign up for The Option Strategist Weekly Updater to receive this market commentary delivered to your inbox each Friday for free.
© 2023 The Option Strategist | McMillan Analysis Corporation