By Lawrence G. McMillan
A week ago, it seemed that the bears had a chance at taking control. Not only did that not happen, but instead the bulls reasserted themselves strongly.
$SPX broke out over resistance at 2070 with a strong move on Wednesday. This chart is bullish, and thus so are we (and you should be, too).
Equity-only put-call ratios remain on buy signals, although the ratios are more or less moving sideways now, rather than declining rapidly.
Both breadth oscillators are on buy signals and are in overbought territory. That is bullish news, for we like to see these oscillators get overbought when a new upside breakout takes place.
Volatility indices have declined again, and that is positive for stocks. In general, $VIX is trading in a range between 13 and 16, and as long as it's going sideways, stocks can continue to rise.
In summary, the indicators are all bullish right now. There isn't a sell signal in the lot. Admittedly, some could roll over to sell signals rather quickly if the market began to weaken, but even that would not be enough to change our bullish opinion. Only an $SPX close below 2040 could do that at this time.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.
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