Nothing has changed

By Lawrence G. McMillan

So, that’s what passes for a “down day” nowadays?   S&P futures were down for most of the day, but only about 7 points at their worst.  But, as has been the case most of the time recently, those losses were regained by the end of the day.  In fact, the Dow ($DJX) recovered all its losses, as it continues to handily outperform $SPX.   Overnight, prices tried to retreat again (modestly), but retail sales data was positive this morning, so now the S&P futures are trading slightly higher on Globex. $SPX support is near 1530 – which is the area of the February highs as well as the location of the rising 20-day moving average.  The recent advance has “stretched” the $SPX chart so that $SPX could have a 30-point correction and still be solidly on an uptrend.

The standard equity-only put-call ratio remains on a buy signal, while the weighted ratio is just flat-lining as roughly an equal number of dollars are being spent on puts as are being spent on calls.

Market breadth oscillators remain solidly on buy signals, despite negative breadth yesterday.  It would take another down day or two before sell signals could emerge here.

$VIX was higher for most of the day Tuesday, as it rebounded from setting a new 6-year low on Monday.  It wasn’t up much, though, so it remains bullish as well. $VIX would have to rise above 14, at a minimum, in order for it to have any bearish overtones at all.

In summary, nothing has changed except that we’ve gone one more day further into overbought territory.  Eventually, there will have to be a correction here, but as we saw at the end of February, even the corrections can be small.

This market comment was taken from this morning's edition of The Daily Strategist Newsletter.