By Lawrence G. McMillan

The low-volume rally of last Friday (July 6th), finishing up the holiday week, was a breakout over resistance at 2740. That has spurred a strong, quick move to the next resistance level at 2800. $SPX is now bumping up against the March intraday highs, and it has closed at its highest price since January.

These new relative closing highs make the $SPX chart bullish in that there is an upward channel with higher highs and higher lows. That channel is marked with blue lines on the chart in Figure 1. The top of the channel is at 2840 and rising, so if $SPX can clearly break out above 2800, that upper trend line should be the next stop.

By Lawrence G. McMillan

$SPX has broken out over resistnace at 2740. This gets it out of the 2700-2740 trading range that is been in for several weeks. The 2700 level has been support and/or resistance for over three months now, acting as a sort of weird magnet for the market.

Above these levels, there is another important resistance level at 2790-2800, which is where the market failed in March and again in June. Unless that resistance is overcome, the $SPX chart won't be in a fully bullish state. Above there, of course, are the all-time highs at 2875, but that is a long way from here.

By Lawrence G. McMillan

Last Monday (June 25th) $SPX gapped down below support at 2740, and a rout was on. Within a few hours, $SPX had fallen all the way to the next support level at 2700. The rest of this week has been spent testing that 2700 level, and it has held for the most part. But the breakdown adds a modicum of bearishness to the $SPX chart. There is now resistance at 2740; there is another gap at 2750, and the 20-day moving average is at 2755.

Below 2700, there is potential support at 2680 -- the late May lows -- but the more intriguing support is the rising 200-day Moving Average, at 2665.

By Lawrence G. McMillan

Stocks have had trouble advancing since June 11th, which is when the strong rally that began on May 29th petered out. This week, especially, has seen a pullback that reached the rising 20-day moving average and also tested support just above 2740. So far, this is nothing more than a simple correction, and the indicators have remained bullish for the most part.

By Lawrence G. McMillan

The most positive thing one can say about the $SPX chart is that the major downtrend lines have been broken, and the gap at 2750 has been filled. Beyond that, the bulls have had to be satisfied with small gains but a failure to penetrate through the resistance at the March highs of 2800. A close above 2800 would be constructive for $SPX, and that should lead to an attempt to make new highs above 2870.

Equity-only put-call ratios remain solidly on buy signals. They are in the lower regions of their charts, so they are getting into overbought territory.

By Lawrence G. McMillan

The island reversal gap on the $SPX chart was finally filled, at 2750, this past week. That moves the $SPX chart out of "bearish" status, but it is still badly lagging indices that have recently made new all-time highs, such as the NASDAQ Composite and the Russell 2000. Even so, this is a big improvement, for all of the other indicators have retained their bullish status as well.

There is now resistance/targets at 2800 and 2870 (the $SPX all-time highs). Support is at 2740, 2700, and at various levels below that.

Equity-only put-call ratios continue to decline, and thus they remain on buy signals, as does the Total put-call ratio.

By Lawrence G. McMillan

Stocks just can't seem to get out of their own way. Both bulls and bears have failed to capitalize on what seemingly should have been opportunities. The bottom line is that the $SPX chart is stuck in a sideways trading range until proven otherwise, with resistance at 2750 and support at 2640.

Put-call ratio charts remain bullish. After Tuesday's sharp decline this week, both ratios rose. To the naked eye, it appeared that sell signals might be emerging. But the computer analysis programs never wavered, continuing to insist that the ratios were still on buy signals -- and they are.

By Lawrence G. McMillan

The Standard & Poors 500 Index ($SPX) is now trapped in a very narrow range, between 2700 and 2740. A breakout above 2750 would be very positive, while a break DOWN below 2630 would be very negative. For most of the rest of the indicators, everything is bullish. But as subscribers know, $SPX is the most important indicator.

For example, the put-call ratios are solidly on buy signals as they continue to fall almost daily.

Market breadth was been decent -- not terrific, but decent. As a result, both breadth oscillators remain on buy signals in modestly overbought territory.

By Lawrence G. McMillan

The market continues to act much better than it did in February through April. That positive intraday reversal on Thursday, May 3rd, still stands as the day that things changed. $SPX has been up most days since then, with only one large down day -- May 15th.

Having said that, the one indicator that is still not in synch on the bullish side is the $SPX chart itself. There is a problem in the 2750 area. Until $SPX closes above there, the chart will continue to have a bearish tint to it.

By Lawrence G. McMillan

A week ago Thursday (May 3rd), the market was on its heels as a large day-long sell program had pushed $SPX below the 200- day Moving Average.  A close below that MA would have signaled some dire things for the bulls, but then a reversal rally took hold   and it hasn't let go yet.  As of yesterday's close, $SPX had rallied 130 points from those intraday lows.