By Lawrence G. McMillan
The chart of $SPX is the least bullish of the indicators. SPX remains in the 2040-2135 trading range that has bound it for most of this year. Basically this is a neutral chart.
Put-call ratios are much more encouraging. A strong buy signal has been generated by the standard put-call ratio (Figure 2). The weighted equity-only put-call ratio is also bullish (Figure 3).
Market breadth remains mixed, with the NYSE-based indicator now on a buy signal, but the "stocks only" is not.
Volatility continues to be the most bullish indicator. Recently, $VIX generated a "spike peak" buy signal as of the close of trading on Monday (July 27th). These are powerful signals.
In summary, there are positive signals emanating from put-call ratios, market breadth, and volatility indicators, as are all generating new buy signals. The only non-conformist is the chart of $SPX (and "stocks only" breadth). There have been many times in the past where $SPX turned out to be the dominant indicator, so I am not saying with certainty that the positive nature of the other indicators is guaranteed to make $SPX break out on the upside, but there is a reasonable chance that they will.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.
© 2023 The Option Strategist | McMillan Analysis Corporation