Weekly Commentary

The stock market continues its slow steady march upward. The $SPX chart
is becoming stretched, though, and is somewhat overbought.

The equity-only put-call ratios continue to decline. Thus, they
remain on buy signals, but they are not far from reaching the lower
regions of their charts, which would make them overbought at least.

Market breadth has been steadily positive, and has reached an
overbought state as well — from which sharp corrections often occur.

Volatility indices ($VIX and $VXO) have continued to drop
steadily. The downtrend in $VIX continues to be bullish for stocks.

In summary, the intermediate-term indicators are all bullish. However,

the short term has become very overbought and as a result, we expect

a near-term pullback before the intermediate-term uptrend resumes again.

Larry McMillan