By Lawrence G. McMillan
Stocks made new all-time highs again this week, overcoming some negativity from a few areas. That negativity remains, but the $SPX chart itself is strong, and so are the NASDAQ Composite and the NASDAQ-100 ($NDX; QQQ).
Early in the week, $SPX pulled back for a couple of days, making daily lows just above 2970. That is the first support area. Just below that is another support area, at 2950-2960.
Equity-only put-call ratio charts (Figures 2 and 3) are still on buy signals. Even though they have curled higher over the past few days and seem to the naked eye to have the potential to move higher and thus generate sell signals, the computer analysis programs that we employ are still ranking them as "buy" at this time.
Market breadth has arguably been the weakest area, at least as far the breadth oscillators are concerned. The breadth oscillators have been flipping back and forth between buy and sell signals for several days.
Volatility has remained at low levels (too low?), and that is bullish for stocks as long as it persists. That is, while $VIX remains trendless at low levels on its chart, the stock market can continue to rise.
In summary, most of our indicators remain on buy signals, especially the important charts of $SPX and $VIX. As long as $SPX remains above support at 2950, we will remain bullish.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.
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