Free Weekly Stock Market Commentary 11/13/26

By Lawrence G. McMillan

A week ago, $SPX was breaking down below support at 7560, and things looked quite negative especially since the $VIX complex was turning bearish as well. But this week, $SPX has managed to rally, and things have calmed down considerably. Even so, $SPX has failed to overcome overhead resistance, so it is still in a bearish mode.

There are three technical resistance factors near 7700 on the $SPX chart which are significant. There is support at 7350 (last week's lows) and then at 7300, dating back to the lows of last June and July at the lower end of the trading range.

Essentially, $SPX is back in the range that it was in last summer -- roughly from 7300 to 7600. Yes, it has probed above 7600 a couple of times, but in my opinion the $SPX chart has a negative bias unless it can close above 7700.

Equity-only put-call ratios continue to race higher, even on days when $SPX has rallied. As long as these ratios are rising, that is bearish for stocks. They will only turn bullish on the stock market when they roll over and begin to decline.

Breadth has been explosive in both directions. The net of this is that the "stocks only" breadth oscillator remains on a sell signal. It had a couple of chances to roll over to a buy signal, but couldn't. Meanwhile, the NYSE-based breadth oscillator remains on a buy signal. Until these two are in agreement, we won't be using breadth as a trading signal.

Implied volatility ($VIX) has been interesting lately. First, let's consider the $VIX chart (Figure 4). A new "spike peak" buy signal occurred at the close on November 9th (green "B" on the chart). Simultaneously, though, a negative signal has been confirmed as well. As we just mentioned, it is negative for the stock market if realized volatility is rising. It is also negative if implied volatility is rising. $VIX generated a new trend of $VIX sell signal at the close of November 6th.

So, the picture leans to the negative sign as long as $SPX is below 7700. The market internals have remained doggedly bearish. Now $VIX is edging towards the bearish side as well. We will take new signals as they are confirmed and will adhere to our trading systems when signals are taken.