It was just over a week ago that $SPX was having some trouble and was testing the 2800 level (August 15th). That test was successful, and the Index has been pressing the upside ever since. It has run into some resistance at the old highs, but it is trying to overcome that. The support level at 2800 remains an extremely important. The $SPX chart remains in an upward channel, as shown by the blue lines in Figure 1.
Equity-only put-call ratios remain on sell signals, technically. But the fact that the ratios are rising while the stock market is also rising essentially means we cannot rely heavily on these signals until the ratios return to an inverse pattern with respect to the stock market.
Market breadth has been fairly strong on the rally over the last week, and both breadth oscillators remain on buy signals. They have gotten into overbought territory as $SPX traded up to new highs, and that is a good thing.
Volatility remains at low levels. $VIX is trendless, which is bullish for stocks. The $VIX "spike peak" buy signal also remains in effect. With $VIX this low (near 12), one would have to consider it to be "overbought," but unless it rises above 15 (and really, above 19), it is not a warning for stocks.
In summary, the indicators remain bullish for the most part, and $SPX is in an uptrending channel. There is some concern that $SPX has not been able to punch through convincingly to new all-time highs, but as long as the support at 2800 holds, the bullish case can be made.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.