Weekly Commentary

The stock market, as measured by $SPX, continued to advance in a narrow low-volatility manner.

In the move so far this year, corrections have been shallow, but their lows have been solid

support areas. Right now the nearest support is near 1390, which is the lows of several
days over the past two weeks. Below that is more substantial support at 1375-1380.

This was the breakout area that was overcome a couple of weeks ago. Moreover, the

20-day moving average is at that level as well. Below there is the solid support at 1340,

which was a also a series of lows. Finally, the trend line that defines this bull market
phase (the line that connects the October and November, 2011, lows) is currently at 1330

(see chart).


Volatility indices ($VIX and $VXO) have continued to decline, trading down to 14 in the last week.

As long as they are in a neutral to declining state, that is bullish for stocks.

In summary, despite some weakening technical indicators,

the market’s trend is bullish until support levels are broken.

Larry McMillan