Weekly Commentary

The technical picture continues to improve — especially in the area of
put-call ratios. However, $VIX is still elevated and $SPX is still trapped in

a trading range. We need to see improvement in those areas before

intermediate-term buy signals can emerge.

$SPX is trapped in a trading range, with resistance at 1330-1340
and support at 1305.


Equity-only put-call ratios have now confirmed their buy signals.

Market breadth generated buy signals a week ago, and while
breadth has not been stellar, those breadth oscillator buy signals
remain in effect.

Volatility indices ($VIX and $VXO) have remained quite elevated

throughout the last few weeks. We continue to maintain the
view that $VIX above 21 is bearish for stocks.


In summary, several buy signals have been generated, but
confirmation is needed in the form of $SPX rising above 1340 and
$VIX falling below 21. If that confirmation takes place, a strong
bullish phase should ensue.

Larry McMillan