By Lawrence G. McMillan
The negative seasonality of September seems to be weighing on the stock market. This has caused $SPX to pull back towards support at 2860-2870. So far, that support has held.
A close below 2860 would be of more concern, but even then there is further support at 2840 and then major support at 2800.
The breadth oscillators are now on sell signals. And now $VIX is probing the 15 level. a close above 15 would be bearish for stocks.
In other areas: for the last two days, new lows have exceeded new highs. It has only been by a tiny amount, but it still negative nonetheless. This is another potentially bearish indicator.
In summary, there are a number of negative indicators lining up. However, one should also note that $SPX has not even pulled back to its rising 20-day moving average yet, so this is still potentially just a minor correction in an ongoing bull trend. It will take violations of support areas in order to confirm sell signals.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.
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