The action in the stock market is getting more volatile, at least in realized terms (implied volatility has not kept pace). The bottom line is that resistance at 2800-2820 has been reinforced, and similarly, support at 2580-2620 has been reinforced as well. The $SPX chart is bearish, in our opinion, as long as $SPX remains below 2820.
Equity-only put-call ratios remain on buy signals. They both curled upward a little bit over the past two violently bearish (at times) trading days, but the computer analysis programs continue to say that both are on buy signals.
Market breadth did not expand much on last week's rally, but it did push the "stocks only" oscillator slightly into overbought territory so that it generated a sell signal this week. The NYSE-based oscillator did not quite reach that level, so it technically remains on a buy signal.
Volatility indices continue to lag. They just have not responded much to the market when it falls. $VIX remains in an uptrend, and that is intermediate-term bearish for stocks. A close below 16 by $VIX would change that.
One more bearish factor is the fact that both NASDAQ-100 ($NDX; QQQ) and the Russell 2000 ($RUT; IWM) continue to under-perform $SPX by a wide margin.
Also, there is generally a year-end bullish seasonal move, but that may not start until late December in an ongoing bear market.
In summary, we remain intermediate-term bearish as long as $SPX remains below 2820.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.