Free Weekly Stock Market Commentary 5/8/2026

By Lawrence G. McMillan

Whether you think it's MOMO (momentum) or FOMO (Fear Of Missing Out), or whatever, it doesn't really matter. This market is a perfect example of why "overbought does not mean sell." Eventually, sell signals will appear, but so far, we have had no confirmed sell signals.

This week saw another gap up on the chart, but very little in the way of a pullback that one could count on as a support level. There is weak or minor support at 7175, 7100, and 7050. Then the main support is 7000. If $SPX were to fall back below that, all of the action this month would have been retraced. That would not sit well, but we're not likely to see a pullback like that anytime soon.

Equity-only put-call ratios continue to drop, as call buying is rampant in this current market. We are not concerned much with the absolute level of the put-call ratio. Rather, we use the direction as the signal, and these ratios won't be on a sell signal until they roll over and begin to rise.

Breadth has improved this month. There was some concern that the breadth oscillators would roll over to sell signals, but is hot happened. Once again, we are back in that state where $SPX is making new highs but breadth isn't all that great, and the breadth oscillators are just clinging to buy signals.

Implied volatility ($VIX) has been dropping, but it has retained enough value to indicate that there is still some fear or worry out there in the marketplace. $VIX has essentially remained in the 17- 18 area, even though $SPX is making new highs. Typically, $VIX would be below 15 in this case, but it's not. So, that indicates that some traders probably large ones are buying $SPX puts to go along with their stock purchases.

In summary, things remain bullish. There are overbought conditions but no confirmed sell signals. The first indications of sell signals will likely come from breadth and/or MVB, and we would trade them if they were confirmed signals. Meanwhile, a buy signal is possible as well from the trend of $VIX. Finally, continue to roll deeply in-the-money calls up to higher strikes.