The stock market has remained in a fairly tight range ever since breaking out over resistance at 3185 in mid-July. This has had the effect of reducing realized volatility (more about that later), as well as frustrating both bulls and bears. There is overheard resistance at 3280 (the July highs) and there is support at 3185 and below that, at 3155.
Equity-only put-call ratios continue to make new relative lows. The standard ratio is chipping away at those January 2004 numbers, and is thus the most overbought it's been in 16-1/2 years. As overbought as these are, they are not yet on sell signals.
Market breadth has been back and forth. Currently both breadth oscillators are on sell signals after another day of poor breadth yesterday.
Implied volatility has fallen -- just not as fast as realized. Even so, $VIX is below its 200-day moving average, and now the 20-day moving average of $VIX has crossed below the 200-day as well (orange circle in Figure 4). This is bullish for stocks.
In the short term, the $VIX "spike peak" buy signal of July 14th remains in place.
In summary, the market seems a bit tired, but $SPX continues to hold above support. So the bulls remain in charge unless $SPX breaks down below support at 3130.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.