The bears have a tight grasp on this market right now, which is a bit surprising since it is so late in the calendar year. Typically by this time, even in bear markets, there is something of a year- end rally.
New post-October lows were established this week when $SPX traded down to 2583 on Monday. That confirms that this is a bear market, in case you had any doubts.
Resistance has developed near 2680, which is just below the declining 20-day Moving Average. The larger resistance area is the one at 2800-2820. If $SPX were to rise above there, then the bear market would no longer be in existence.
On the downside, there is support in the general area of the recent lows, which are similar to the lows of late March. Hence there is support at roughly 2580.
Equity-only put-call ratios are on buy signals. To the naked eye, that may not be so obvious, but the computer analysis programs affirm that these ratios are on buy signals.
Market breadth oscillators dove into oversold territory early this week. For one day, they gave buy signals when there was strongly positive breadth on Wednesday. But now, they're back on sell signals again.
Volatility indices have remained somewhat elevated, meaning that $VIX is still in an uptrend. That is intermediate-term bearish for stocks.
In summary, this remains a bear market. There are some potential buy signals on the horizon right now, and that might provide some relief. Those may be tradeable, but keep a core bearish position as well.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.