By Lawrence G. McMillan
It is hard to imagine a market any more perverse than this one. Once again, there has been a failure to break out on the upside, despite some favorable (although not unanimous) technical conditions. Now $SPX has pulled back into the previous trading range, whose limits of 1810-1900 are more secure than ever.
Equity-only put-call ratios continue to remain on split signals. It is only fitting, I suppose, that these ratios continue to be in conflict while at the same time $SPX can't find a direction to sustain.
Market breadth indicators are in a bearish state now, with both of them on sell signals.
Volatility indices ($VXST, $VIX, and $VXV) have not risen much at all, and thus they remain in a generally bullish mode.
In summary, the market is back within its trading range, awaiting a breakout. I can't really imagine a less overbought condition than there was when $SPX made new highs last Monday, and yet there was no follow-through. So, the trading range appears to be the order of the day for the foreseeable future.
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