We are looking for this market to break out on the upside - $SPX

By Lawrence G. McMillan

The stock market edged higher yesterday, which keeps alive the prospects of an upside breakout in the near future.  Equity-only put-call ratios both made new relative lows on their charts, so that is quite bullish.  Recall also that the Total put-call ratio moved to a new buy signal at Friday’s close.  Breadth was especially positive in terms of “stocks only” data yesterday, and both breadth oscillators remain on buy signals.  Volatility indices were mostly unchanged yesterday, but $VIX is hanging around the 16 level, which is generally bullish for stocks.  

In summary, we are looking for this market to break out on the upside, but it needs to do it fairly soon, while the positive indicators are in place.  If that breakout occurs, we will add to the long SPY call positions.

This market commentary was taken from this morning's edition of McMillan's Daily Volume Alerts.