By Lawrence G. McMillan
$SPX pulled back this week, partly because the market was overbought and also because the week after June expiration is a seasonally weak week. So far, it's just a normal pullback, with support at 2890-2900.
Equity-only put-call ratios remain strongly on buy signals. Their downward trajectory was not even fazed this week, as they held steady to their buy signals even while $SPX corrected a bit.
Market breadth continues to dance back and forth without getting extremely overbought or oversold. At this point, both oscillators are on buy signals.
$VIX has remained at somewhat elevated levels without actually turning bearish. So, as long as $VIX stays below 17, the stock market can still rise without concerns from volatility.
The intermediate-term outlook remains generally bullish as long as $SPX holds above support and $VIX does not break out to the upside.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.
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