fbpx Weekly Stock Market Commentary 6/2/2023 | Option Strategist
Home » Blog » 2023 » 06 » Weekly Stock Market Commentary 6/2/2023
By Lawrence G. McMillan

The market finally looks like it is breaking out on the upside. After numerous failed attempts to exceed and hold above 4200, $SPX seems to be on the way to doing just that. If it closes above 4210 today (June 2nd), that will be confirmation of an upside breakout.

The next target and resistance is the 4300 level the highs of last August. If that can be overcome, then the picture is quite bullish, with only 4650 (the highs of March 2022) and 4800 (the all- time highs) as obvious resistance areas.

Both equity-only put-call ratio charts are on buy signals. The standard ratio (Figure 2) rolled over first, and since its buy signal is coming from a relatively high level on its chart, it is normally a strong one. The weighted ratio (Figure 3) is less bullish. It sort of belatedly rolled over to a buy signal.

In any case, as long as these ratios are declining, they remain on buy signals.

Breadth has been swinging back and forth in rapid fashion, and in general it has been weaker than the broad market indices (which have been propelled by the AI and tech stocks, while many other stocks have languished). Having said THAT, both breadth oscillators are on buy signals now. So, if the upside breakout is confirmed by $SPX, it will be important to see breadth confirming that breakout as well.

The most bullish indicator all along has been $VIX and its various related indicators. That continues to be the case. Both $VIX-based buy signals are still in place.

In summary, we are going to take a "core" long position if the upside breakout is confirmed today by $SPX. In addition, we will trade other confirmed indicator signals as they occur.

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

The Option Strategist Newsletter $29 trial