Overbought conditions proved to be more than the positive charts of $SPX and $VIX could handle, and there was a sharp, but short-lived correction this past week. That correction ripped right through the first support level at 3090 on the $SPX chart. However, support held at 3070 near an area (3065- 3070) that had previously been support, so it is now reinforced.
Equity-only put-call ratios reached extremely overbought territory. Now, they have begun to visibly roll over and seem to be starting to rise. Thus, visually, they seem to have issued sell signals.
Market breadth oscillators are negative, too, with both being on sell signals at the current time. The "stocks only" oscillator sell signal didn't occur until December 2nd, but the NYSE oscillator has been mostly negative since mid-November.
Volatility is a more complex situation, but suffice it to say that both the short-term and intermediate-term $VIX indicators are still bullish for now.
In addition to the above technicals, this is a seasonally bullish period for stocks. The Post-Thanksgiving "rally" is not exactly a robust one yet, but the Russell 2000 is beginning to outperform $SPX.
In summary, the $SPX and $VIX charts remain positive and have seemingly clear demarcation levels. As long as $SPX remains above support, and $VIX remains subdued, the outlook for stocks is bullish.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.