By Lawrence G. McMillan
The most positive thing one can say about the $SPX chart is that the major downtrend lines have been broken, and the gap at 2750 has been filled. Beyond that, the bulls have had to be satisfied with small gains but a failure to penetrate through the resistance at the March highs of 2800. A close above 2800 would be constructive for $SPX, and that should lead to an attempt to make new highs above 2870.
Equity-only put-call ratios remain solidly on buy signals. They are in the lower regions of their charts, so they are getting into overbought territory.
Market breadth has been pretty much steadily positive. As a result, the breadth oscillators remain on buy signals, and they are modestly overbought.
Volatility remains one of the most bullish indicators. Meanwhile, $VIX remains stagnant -- trading sideways to down and staying below 15. That is bullish fodder for stocks as well.
All in all, things are bullish. All of the indicators are on buy signals, and the $SPX chart is no longer bearish (I can't really say it's all that bullish until it at least rises above 2800). So for now, we are looking for higher prices. Should sell signals develop, we would act on them, but we are not going to anticipate them.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.
© 2023 The Option Strategist | McMillan Analysis Corporation