By Lawrence G. McMillan
$SPX now appears to failing at the top of the range, thereby remaining within the 2040 - 2135 trading range. Hence, the $SPX chart remains neutral as long as it's in that trading range.
Put-call ratios are mixed, but generally are in an oversold state. The standard ratio continues to rise and is thus on a sell signal. The weighted ratio, however, has rolled over to a buy signal.
Market breadth has been poor lately, and that has caused some concern. Both ratios have now reached an oversold status, which is a bit surprising since $SPX hasn't pulled back all that much.
Volatility has been generally bullish in that $VIX is in a downtrend or is trading sideways at low levels on its chart. $VIX has traded below 12 a few times recently, and that is an overbought condition.
In summary, the $SPX chart is neutral, and the indicators are mixed. Unless $SPX breaks out with simultaneous strong buy signals, the trading range environment will persist.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.
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