By Lawrence G. McMillan
$SPX has finally broken out to new all-time highs and has maintained that status by closing above the old highs for four consecutive days. That's the bullish news. The less-than-bullish news is that the breakout is not being confirmed with any resound by some of the other indicators. However, as long as $SPX remains above the 2065 support level, the bulls are in charge.
Equity-only put-call ratios are in agreement with $SPX. They are on buy signals, and the ratios are moving lower daily, which is bullish for stocks.
However, market breadth is another matter. Breadth has been something of a problem since last summer. Yes, at this time both breadth oscillators are on buy signals. But one serious day of negative breadth and both of these oscillators could roll over to sell signals. That is not supposed to be the way that the breadth indicators look when $SPX is trading at new all-time highs.
Volatility is lower than it was during December and January, and that is generally bullish for stocks. $VIX is still a bullish indicator for stocks as long as it continues to close below 17.
In summary, the market is at new all-time highs, and as long as $SPX holds above support at 2065, we will remain bullish.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.
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