Weekly Commentary

The stock market remains volatile within an ever-narrowing range. For ten days now, SPX has traded within a range of 1190 to 1230. Clearly a breakout of that range should be significant.

Equity-only put-call ratios are a bit mixed. The weighted ratio rolled over to a buy signal about two weeks ago, but the standard ratio has continued to climb — thereby remaining on a sell signal.

Breadth indicators continue to remain on buy signals, and they have reached varying degrees of overbought.

The most bearish indicator has been VIX. The fact that VIX has moved above 33 is bearish, as it completely negates the previous breakdown of last week.

In summary, we are not saying that anything is in place yet; rather, we will observe the move in SPX — either above 1230 or below 1190 as the trigger for the next move.

Larry McMillan