Weekly Stock Market Commentary 6/20/14

By Lawrence G. McMillan

Once again we see that nothing really can stop this bullish market. This week, there were three separate pieces of news/data that theoretically could have done so, but they had little effect.

So $SPX is now trading at new all-time highs. The "old" support level at 1900 is still in place, and now there is support at 1925 (last week's lows).

Equity-only put-call ratios remain solidly bullish, although they are very low on their charts (Figures 2 and 3) and are thus reaching overbought status.

Market breadth indicators moved to the brink of sell signals, but those sell signals did not materialize. Now, they are strongly overbought once again.

Volatility indices ($VXST, $VIX, and $VXV) are trading at very low levels. However, the market can continue to rally while this is the case. $VIX came close to giving a sell signal this week (i.e., it came close to rising above 13), but it did not.

In summary, all of our indicators are bullish (there are no sell signals in place at this time), and we thus remain intermediate-term bullish. Overbought conditions might produce a sharp, but short-lived correction at any time.

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