By Lawrence G. McMillan

This market is still akin to a runaway freight train. The momentum is strong and positive, and there are no confirmed sell signals at this time. This has made the market "overbought" in a general sense, but subscribers know that "overbought does not mean sell." Only confirmed sell signals mean "sell."

The $SPX chart remains strong. The Index has risen so far, so fast, that support levels are quite far below current levels. The first real support level is the March highs, which have not been retested. That support level is at 3990. Below that support level, there is stronger support at 3850-3870.

Meanwhile, the equity-only put-call ratios remain on buy signals -- especially the weighted ratio. The standard ratio is not dropping as fast, but remains on a buy signal as well. These ratios will remain positive for stocks until they roll over and begin to rise.

Breadth has still been a laggard. It has not been robust, but the breadth oscillators remain on buy signals.

That brings us to the subject of volatility, an area where the indicators have generally been bullish for stocks since April 2020. The previous $VIX "spike peak" buy signal has expired, but the trend of $VIX is down, and that is bullish for stocks.

In summary, we continue to recommend holding a "core" bullish position, as we have done for some time. As the market continues to rally, roll long call strikes up and raise trailing stops. We will take bearish positions around the "core" bullish positions when such sell signals appear.

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