The stock market came into the Thanksgiving holiday in a very strong fashion -- continuing the strong rally that has taken place throughout November. A move above 3644 would be into new all-time intraday high territory. Once $SPX makes that move, there is no resistance in the traditional sense.
Meanwhile, on the downside, there is support just above 3500. A close below there would be very negative, for it would place $SPX back within the old trading range.
Equity-only put-call ratios have moved lower this week, continuing the pattern that began last week. This has been caused by a continuation of the heavy call buying in the market. These put- call ratios, despite their overbought state, won't turn bearish again until they begin to rise.
Market breadth has generally continued to be strong, keeping this our most bullish indicator. Both breadth oscillators are on buy signals, in modestly overbought territory. In this case, "overbought" is a good thing when $SPX is breaking out to new highs, for it indicates that the breakout has plenty of support across a lot of stocks and sectors.
Volatility is basically in the bullish camp for stocks, too. The $VIX "spike peak" buy signal of October 29th "expires" today, but the trend of $VIX remains downward, which is bullish for stocks.
We are also entering a seasonally bullish period for the market, between Thanksgiving and the new year. On average, the Russell 2000 Index ($RUT) rises 2.8% over that time period, with $SPX not far behind. There are exceptions, of course 2018 being the largest exception.
So, we remain bullish as long as $SPX continues to close above 3500.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.