Overall, the $SPX chart -- which is, by definition, the most important indicator -- remains positive. $SPX did have a pullback at year's end. The subsequent rally off of the 20-day moving average leaves support at 2233 (last Friday's lows). Below that, there is support at 2210 and 2190 (all marked on the chart in Figure 1).
The equity-only put-call ratios have pushed lower as the rally has continued. That means they remain on buy signals.
Market breadth continues to be the most volatile indicator, flopping back and forth with the short-term movements of $SPX. Most recently, breadth was strong enough to cancel out the previous sell signals and return both breadth oscillators to "buy."
Volatility remains supportive of the bullish case, and recent movements in $VIX have clarified the picture there to a certain extent. When $SPX sold off at the end of 2016, $VIX rallied a bit, and made an intraday high just shy of 15. That was almost exactly the same level where it had also made an intraday high back on December 1st.
So that is a significant level, which we are going to use as the demarcation line between bullish and bearish. That is, as long as $VIX remains below that level (marked on the chart in Figure 4), stocks can rise, but if $VIX closes above that level, then it's possible that an uptrend would be beginning in $VIX and that is bad for stocks.
In summary, none of the indicators is negative. As a result, we remain intermediate-term positive on the market unless $SPX breaks support and $VIX breaks out -- neither of which appears to be imminent.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.