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By Lawrence G. McMillan

The prospect of lower rates in both Europe and the U.S. has driven the market into a bullish stampede, as it seems to be on a massive "high."

There should now be support on the $SPX chart at 2890-2900, the area which was most recently overcome as resistance. Below there, it's a sharp drop down to the major support at 2720-2730 (the March and June lows). There is no formal resistance, since we are trading at new all-time highs.

The equity-only put-call ratios remain strongly on buy signals. Whereas we saw heavy put buying all through May and even into June, now we are seeing heavy call buying. These ratios will remain on buy signals as long as they continue to decline on their charts.

Market breadth was having trouble gaining traction on this rally, but it has finally come around. Both breadth oscillators are now on buy signals and moving deeper into overbought territory.

This brings us to volatility. While $VIX is a bit higher than it usually is with $SPX at new highs, it is still benign. $VIX is not a problem for stocks unless it closes above 17.

In summary, our indicators are mostly bullish, so we are bullish for the short term.

This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.

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