Weekly Stock Market Commentary 11/27/2015

By Lawrence G. McMillan

The market is struggling to maintain the rally that began with an abrupt V-bottom on November 16th. It may be merely an oversold rally.

From a larger perspective, $SPX has support at 2020 (the November lows) and resistance at 2120-2135 (the row of highs made in the last year or so).

Equity-only put-call ratios are split in their outlook. The weighted ratio rolled over to a sell signal a little more than a week ago, but the standard ratio remains on a buy signal (see Figures 2 and 3).

Market breadth has been positive for six days in a row, and that has helped the breadth oscillators, a both are on buy signals.

Volatility indices have moved steadily lower since the latest $VIX "spike peak" buy signal, about two weeks ago. That is bullish.

Finally, the period between Thanksgiving and New Year is bullish.

In summary, signals are mixed, but the seasonal period will most likely propel prices higher. It's just that there could be a pullback first (as there was last year.

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