By Lawrence G. McMillan
The stock market, as measured by the Standard & Poors 500 Index ($SPX) continues to trade in a fairly tight range, which is beginning to frustrate just about everyone. There is support at 2070, and the 2130-2135 area is now strong resistance. As a result, the $SPX chart is neutral.
Equity-only put-call ratios are about as noncommital as I can remember. Both are drifting sideways, meaning they're not really on a strong trend of any kind.
The market breadth oscillators are also split in their outlook.
Volatility remains bullish. $VIX would have to break out of its range and begin trending higher in order to produce a sell signal. As long as $VIX is within this range, stocks are not in any real danger, and they can rise.
In summary, $SPX remains trapped in a trading range, and the indicators are neutral. I have trouble envisioning an immediate upside breakout being successful. The other indicators just don't support it. If $SPX did break out to new highs immediately, it would likely be a false breakout like the one from a month ago.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.
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