The stock market, as measured by the Standard & Poors 500 Index ($SPX) rather quietly bottomed a week ago and has moved steadily higher over the ensuing week. Thus, the $SPX chart remains bullish with support at 2350 level.
Equity-only put-call ratios continue to creep higher. This has had the effect of generating sell signals, at least according to the computer programs that we use to analyze these charts. In reality, these charts won't be truly bearish until the put-call rises sharply and steadily from here.
Market breadth had deteriorated during the market's correction to the extent that both breadth oscillators dropped into true oversold territory. Now breadth has improved, as noted earlier (box on page 1), and buy signals have been generated from both of the oscillators.
And in the category of "so what else is new?" volatility remains bullish for stocks. Despite the recent market (minor) correction, $VIX was not able to even challenge the 13 area -- the minimum level that we think $VIX would have to exceed before one could even begin to think about $VIX being a negative indicator for stocks.
In summary, we continue to see things pretty much as has been the case since the US election: we remain intermediate-term bullish unless $SPX breaks support and $VIX breaks out over resistance.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.