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$SPX 6/28/2024
By Lawrence G. McMillan

Stocks have traded in a tight range for several days. While there's some divergence between $SPX and the broader market, the trend remains upward with $SPX hitting new highs. Support levels are at 5400, 5350, 5260, and possibly 5450.

Equity-only put-call ratios are moving sideways near the lows of their charts. This is an overbought condition but not a sell signal. These ratios need to rise sharply to confirm a sell signal.

Breadth has been mixed but sufficient to keep the breadth oscillators on buy signals, despite some negative divergence. Cumulative Volume Breadth (CVB) may reach a new high, potentially removing this divergence.

$VIX remains low, supporting a bullish trend unless it rises above its 200-day Moving Average of 14.50. The volatility derivatives construct remains bullish for stocks.

We maintain a core bullish position aligned with the $SPX chart's bullishness, trading around confirmed signals. Despite several overbought conditions, "overbought does not mean sell."

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

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