Weekly Stock Market Commentary 11/21/14

By Lawrence G. McMillan

The stock market advance is relentless.  It has refused to correct for more than a day since bottoming over a month ago and over 230 points lower., but it is up another 12 points in overnight trading as I write this.  The chart of $SPX is bullish because it remains in an uptrend.

Equity-only put-call ratios remain on buy signals, as they continue to drop sharply almost daily.    

Market breadth has been rather poor of late.  In fact, twice this week both breadth indicators slipped into sell signals, only to bounce back up and cancel out those sell signals the very next day.  As a result, at the current time, the breadth indicators are clinging to buy signals.

Volatility indices has remained at low levels, and thus are have not been an impediment to rising stock prices.

In summary, the indicators are all positive.  Yes, some sell signals are lurking, but none have been able to stick for more than a day. Consequently the intermediate-term picture is bullish, but there is a growing overbought condition that could manifest itself with a sharp pullback, within the ongoing bullish trend.

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