When NASDAQ leads the way, the market tends to respond strongly especially in the tech-dominated market of the last 15 months. That's what's happening low: both the NASDAQ Composite and the NASDAQ-100 ($NDX; QQQ) broke out to new all-time highs this week, after having lagged behind in May. Led by this strong move in NASDAQ, $SPX has once again closed at a new all-time high.
For the record, $SPX has support at 4167 (the twice-tested lows of June) and at 4060 (the twice-tested lows of May).
Equity-only put-call ratios continue to remain on buy signals. They have been dropping steadily since their last buy signals in late May. Despite the fact that these ratios are once again reaching the lower regions of their charts, they will remain on buy signals as long as they are declining.
Breadth has been something of a problem. It has recovered this week, and the breadth oscillators are finally back on buy signals.
But breadth needs to continue to expand as $SPX moves higher. Volatility has generally been decreasing. The trend of $VIX is lower, in that $VIX is below both its 20-day and 200-day Moving Averages, and both of those MA's are declining. That is bullish for stocks.
In summary, with the upside breakout to new all-time highs by $SPX, the outlook has improved. We still want to see breadth improve, but as long as $SPX is above the tested support level of 4167, the bulls remain in charge. We will take both confirmed buy and sell signals, should they occur.
The Weekly Updater Stock Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.