By Lawrence G. McMillan
$SPX couldn't develop any momentum this week. Perhaps -- as the media were saying -- stocks were just waiting for the jobs report this morning. It was a very poor jobs report, and S&P futures are down 20 points. If $SPX does indeed open 20 points lower on Monday morning, that will be a violation of the 2040 support area. With that support level broken, $SPX prices are likely to test the lower support near 2000 or slightly lower.
Equity-only put-call ratios remain on sell signals, as they have since early March.
Market breadth was surprisingly strong on Thursday (despite a declining market) and Friday. However, with Monday's impending decline, it is likely that breadth will remain on sell signals.
Volatility has been the one area that has not been bearish. $VIX remains in a trading range between 13 and 17, and as long as that is the case, it is not an impediment to higher stock prices. However, a close above 17 by $VIX would be a breakout that is bearish for stocks.
In summary, the indicators are bearish, with the exception of volatility.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.
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