The $SPX chart remains bearish. This week's action did not decline far enough to be a test of the October lows. The support area at 2580-2600 remains the bulls' best hope at the moment. If that gives way, then 2530 is the next stop. A violation of that area would be very negative.
Overhead, both the 20-day and 200-day Moving Averages are declining. The 200-day, especially, should act as resistance. Ultimately, though, the resistance at 2820 is the one that would have to be overcome in order to change the $SPX chart from its current bearish status.
Put buying has been heavy over the past week, and the standard ratio is now at yet another new high (Figure 2). This cancels out its previous buy signal. The weighted ratio is edging higher, too -- it just hasn't surpassed its previous peak (Figure 3). That puts the recent weighted ratio buy signal in question.
Market breadth was extremely poor early this week, and both breadth oscillators descended into officially oversold territory. But Wednesday's action improved things, so if there is another day of positive breadth at this point, buy signals could emanate from this indicator.
The only indicator that is not in a bearish frenzy of sorts is volatility. It continues to plod along, moving slightly higher showing no signs of urgency or panic.
In summary, this market continues to play out like a bear market. It made interim highs on a strong run in late October that has now given way to nasty selling in November. The last eight bear markets had similar patterns, all of which broke the October lows in late November or early December. We expect that this bear market will do the same in the next week or two.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.