Stocks have managed to overcome each resistance level with some effort but have not been able to accelerate to the upside. $SPX has encountered resistance at 3155, 3185, 3235, and now 3280 (or just below). Hence the advance has been -- choose your favorite adjective -- labored, halting, tired, or merely stairstep. Whichever one you choose, none have resulted in a strong breakout. But the $SPX chart will remain bullish until support in the 3100-3130 area is broken.
Equity-only put-call ratios have continued to fall to new relative lows. These are all very overbought readings, and the computer analysis programs rate them as "sell." Personally, the best I can give them is the "?" on the charts in Figures 2 and 3, because I want to see them rising swiftly in order for a full-blown sell signal to be in effect.
Market breadth has managed to stay positive enough to keep the breadth oscillators on buy signals, in modestly overbought territory. With the market making new relative highs for the post-March rally this week, one might have hoped for more from breadth, but it was not forthcoming.
An area that has slowly been becoming more bullish is volatility. $VIX closed below its 200-day moving average on July 17th and has remained below there. In the short-term, the $VIX "spike peak" buy signal of July 14th remains in effect.
In summary, the $SPX chart remains positive, and that is the largest factor of all. There are several indicators that are not far from sell signals (breadth and put-call ratios, to name two), but until there are confirmed sell signals and an accompanying breakdown in support on the $SPX chart, the bulls remain in charge.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.