Stocks have tried to find a catalyst to spur them in one direction or the other, but they have been unable to do so. $SPX is locked into the 2120 - 2195 trading range. A clear breakout in either direction should be respected.
The equity-only put-call ratios continue to be mixed in their outlook, although the charts are not all that different. The standard ratio (Figure 2) has been on a buy signal for over a week, while the weighted ratio (Figure 3) remains on a sell signal -- at least according to the computer.
Market breadth has been swinging back and forth quite strongly. This has resulted in multiple signals. The latest is a sell signal.
Volatility indices have mostly declined since their early September peak. We continue to view 15 as a sort of demarcation line between bullish and bearish.
In summary, until $SPX breaks out of the 2120-2195 area, expect mixed signals from the indicators and a directionless market. But a breakout from that range can and should be traded.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.