Free Weekly Stock Market Commentary 2/6/2026

By Lawrence G. McMillan

Volatility has increased with the failure once again of $SPX to clearly break out to new all-time highs. It last made a marginal new all-time intraday high on January 28th. SPX continued to probe those highs and then fell back. That established resistance near 7000. At that point, selling accelerated, taking $SPX down to 6780 at the close on Feb 5th, from where it has bounced strongly today.

So the January lows at 6800 were broken, but not by much, so one could still say that 6780-6800 is a support level. What is also important, though, is that if that support at 6720 gives way, then a truly bearish scenario would unfold.

Equity-only put-call ratios have curled higher over the past few days. The standard ratio (Figure 2) was the first to move, but now the weighted ratio (Figure 3) has joined in as well. The computer analysis programs rate both of these charts as currently being on sell signals.

Market breadth has not been good, and both breadth oscillators rolled over to confirmed sell signals this week. Having said that, breadth is very strong on today's huge turnaround rally, so it is possible that such a could take place.

The largest change in indicator direction has been in the implied volatility complex $VIX and its various components. $VIX has risen from 14 in late December to a high above 23 yesterday. Even so, it did not reach "spiking" mode until yesterday (February 5th). So, it is possible for stocks to decline sharply while $VIX is in "spiking" mode, but eventually a new spike peak buy signal will occur when $VIX closes more than 3.00 points below its spike peak high.

In summary, things are really quite mixed right now. Last night, it seemed that the bears had yet another chance to take control. They have not, and now it seems that the bulls are ready to roll. But we know they haven't been able to push $SPX above 7000 meaningfully. So, we'll just let our indicators play out and take confirmed signal trades as they occur.