By Lawrence G. McMillan
$SPX remains in a strong uptrend. However, it has reached overbought levels, in that it is "too far" above its 200-day moving average. The first support level is 1670, and if that is violated, traders should turn cautious.
The equity-only put-call ratios remain on buy signals, despite "wiggles" at the end of some charts.
Market breadth indicators are still on buy signals, but are at a point where another day of strong negative breadth would likely push them over to sell signals.
Volatility indices ($VIX and $VXO) remain bullish. The trend of $VIX remains downward (bullish for stocks), and that will be the case as long as $VIX closes below 15.
In summary, the indicators remain bullish, but overbought conditions augur for a correction, likely to be short-lived, but could be more serious if more sell signals develop in the intermediate-term indicators.
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