Free Weekly Stock Market Commentary 8/28/26

By Lawrence G. McMillan

Traders were a bit leery of some potentially volatile events this week, but so far they have not proven to be troublesome. The NVIDIA (NVDA) earnings were positive, and the stock rose. That was a relief to the market. Also, Fed Chair Warsh made the Keynote Address at the Jackson Hole Monetary conference this morning. The market's reaction is muted.

There is still resistance at 7740 to overcome (blue horizontal line on the chart in Figure 1), but that is certainly doable. There is major support in the 7600-7640 area, which not only is the level of the previous all-time high, but is also where a gap exists (pink circle in Figure 1). Overhead, the next resistance area is the all-time highs just above 7800.

The equity-only put-call ratios remain on buy signals, so that is in line with the $SPX chart. They continue to decline, and as long as that is the case, it is positive for the stock market.

But breadth has not been positive. Since August 14th, it's been a struggle for breadth. As a result, both breadth oscillators remain on sell signals.

$VIX, on the other hand, has remained subdued, and stocks can advance when that is the case. $VIX has generally traded between 15 and 16. As a result, the trend of $VIX buy signal for the stock market remains in place.

So, the overall picture remains bullish. We will continue to trade confirmed signals as they arise and to roll deeply in-the-money options.