Weekly Stock Market Commentary 5/3/13

By Lawrence G. McMillan

Individual indicators are bullish in their own right, but price (i.e., the chart of $SPX), is without a doubt the number one factor for consideration.  There is support in the 1575-1580 range -- generally in the area of the lows of the past couple of weeks.

Equity-only put-call ratios are both on buy signals.

Market breadth has advanced a lot with many very strong days since mid-April.  The net effect is that the breadth indicators have remained on buy signals for about two weeks and are in overbought territory.

Volatility indices ($VIX and $VXO) are bullish as well.  With $VIX below 14, stocks should have little trouble advancing.

In summary, despite considerable gains already this year, $SPX remains bullish.   The technical indicators are bullish, too.  If $SPX were to fall below 1575, then the situation would change to neutral, and a close below 1540 would be outright bearish.

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