By Lawrence G. McMillan
The stock market's strong rally has continued for another week, although it's beginning to act a bit tired, and the market is getting overbought. Even so, the $SPX chart is still in an uptrend, and there is support at 2040, 2020 and 2000.
Equity-only put-call ratios continue to plunge, and that is bullish for stocks. These ratios are now in the lower portion of their charts, which is just on the verge of being overbought.
Market breadth has remained one of the weaker components. At the current time, the breadth oscillators are clinging to buy signals, but negative breadth today will produce sell signals.
Volatility indices have been edging higher this week, possibly as result of traders worrying about the Unemployment Report. If $VIX begins trending upwards, that would be bearish for stocks.
In summary, the majority of the indicators are still bullish. But overbought conditions are beginning to appear.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.
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