The stock market has signaled that whatever was holding it back for the past couple of weeks ("correction" would be too strong of a word) is over. $SPX and all the other major indices have broken out to new closing and intraday all-time highs. This includes the previously-lagging Russell 2000 Index ($RUT, IWM).
For the record, there is support on the $SPX chart at 2560 (last week's lows), 2545 (the late October lows), and 2510, the breakout level back in September. Since this latest upward leg in the market started, with that breakout over 2510 in late September, $SPX has closed below its rising 20-day moving average exactly once!
Call buying has been heavy over the past few days, again confirming the strength in $SPX. Both equity-only put-call ratios are on buy signals, although the current state of the weighted ratio is a bit questionable, as noted in Figure 3.
Market breadth has improved strongly over the past week. This has had the effect of putting both breadth oscillators back on buy signals.
Volatility indices are all back down to extremely lows levels as well. That makes them overbought, but not bearish. Stocks can continue to rise while volatility is in a low, overbought state.
In addition to all of these bullish indicators, a strong period of bullish seasonality is being entered. It extends through the end of the year, from this point.
In summary, most of the signs are bullish. Whatever it was that took place over the past couple of weeks appears to be over. The bulls have complete control once again, and higher prices seem likely over both the short- and intermediate-term horizons.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.