By Lawrence G. McMillan
With the holiday weekend approaching, and attendance low because of it, the bears took a couple of shots this week at breaking $SPX down below support at 2160. They came close, but they couldn't do it. Thus, the $SPX chart remains positive, with support at 2160.
Equity-only put-call ratios have been edging higher all week, and they remain on sell signals because of it. But they aren't really rising much, so the sell signals aren't strong.
Similar things can be said about the breadth oscillators. Both breadth oscillators are currently on sell signals, but they kind of "eroded" into that state.
$VIX remains trapped in the low-level trading range, and stocks can continue to rise while $VIX is trendless.
In summary, we are in a similar state to where we've been for a month or more: there are sell signals from breadth and put-call ratios, but those signals have not been confirmed by a breakdown in $SPX or a breakout in $VIX. As a result, the outlook is short-term bullish as long as $SPX remains above 2160.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.
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