By Lawrence G. McMillan
The stock market continued its bullish explosion this week. $SPX broke through its previous down trend line last Friday, and has now overcome the late-May high. All that remains is a test of the post-2009 highs at 1370.
Equity-only put-call ratios turned bullish when they peaked and began to fall. These are intermediate-term buy signals.
Market breadth has been very strong during the rally. Breadth indicators remain on buy signals, but are now very overbought.
Volatility indices ($VIX and $VXO) are perhaps the most potentially problematic indicators, since $VIX has dipped back below 16 again.
In summary, the intermediate term outlook is bullish as all indicators are on buy signals. There are overbought conditions in $VIX and breadth, and they might generate some short-lived corrections, but the general trend is higher.
Click here to view this week's charts
Sign up for The Option Strategist Weekly Updater to receive this market commentary delivered to your inbox each Friday for free.
© 2023 The Option Strategist | McMillan Analysis Corporation