From early March through mid-April, $SPX was on a tear. Since then, it went mostly moved sideways, while establishing a support area near 4120. Now it's broken out to the upside again. Below 4120, there is support near 4000 (the March highs), but that is an area that was never tested, since $SPX just blew right through the March highs on a double gap move higher in early April. Finally, the support at 3850-3870 is still important, for that is the area from which the current leg of this rally was launched.
Equity-only put-call ratios remain on sell signals. The levels of put buying have increased and/or call buying has diminished recently. This has caused the ratios to rise, and that is a bearish signal.
Breadth has been something of a problem for the market, dating back weeks. This is partly due to the "drag" that NASDAQ has been. However, both breadth oscillators are back on "weak" buy signals at the current time.
Implied volatility ($VIX) has not increased much, and it certainly hasn't spiked up. Thus, it remains friendly to the stock market. From the chart in Figure 4, you can see that $VIX has traded in a tight range (mostly 17 to 20) for the entire month of April.
In summary, the $SPX chart is still trending upward. Look at Figure 1. It is easy to see that the Bands and the moving averages are sloping upwards. That alone is justification for continuing to hold a "core" bullish position. We will trade confirmed sell signals around that bullish "core" if and when they are confirmed, but only a violation of support levels would turn the outlook truly bearish.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.