fbpx Weekly Stock Market Commentary 2/24/17 | Option Strategist

Weekly Stock Market Commentary 2/24/17

By Lawrence G. McMillan

Stocks have continued to move higher across all of the major averages. As might be expected after an advance of this magnitude and length, overbought conditions continue to abound.

One of the foremost things to consider, though, is that the chart of $SPX remains bullish. It continues to trend higher, with all moving averages in sync. The first major support area is at 2300.

Both equity-only put-call ratios continue to decline and thus remain on buy signals.

Market breadth has not been great on a daily basis. The rally has not been kind to all stocks, but there is a lot of rotation, and not all stocks are being lifted by the expectations for tax and regulatory relief that this rally seems to be based on. Even so, the breadth oscillators remain on buy signals.

Volatility continues to remain low, and thus is not an impediment to higher stock prices. For $VIX to be problematic, it would have to begin to establish an uptrend.

In summary, we may soon see sell signals from some overbought indicators. But we've seen that before, and it wasn't enough to stop the rally. We would need to see $SPX break support and $VIX break out over resistance before we would abandon our current intermediate-term bullish outlook.

This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.

The Option Strategist Newsletter $29 trial

Option Strategist
Blog Search

Recent Blog Posts

Trading or investing whether on margin or otherwise carries a high level of risk, and may not be suitable for all persons. Leverage can work against you as well as for you. Before deciding to trade or invest you should carefully consider your investment objectives, level of experience, and ability to tolerate risk. The possibility exists that you could sustain a loss of some or all of your initial investment or even more than your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and investing, and seek advice from an independent financial advisor if you have any doubts. Past performance is not necessarily indicative of future results.
Visit the Disclosure & Policies page for full website disclosures.