Weekly Stock Market Commentary 8.9.13

The overbought conditions that had existed a couple of weeks ago were largely worked off by a sideways to slightly down stock market, as measured by the Standard & Poor’s 500 Index ($SPX).  It seems that the bears had their chance, but didn’t seize it once again.  There is strong support in the 1670-1680 area.

L M 8 9 spx

Equity-only put-call ratios remain on buy signals.

Market breadth has generally been quite weak over the past few
weeks.  As a result, the breadth indicators have returned to more
normal levels from their overbought extremes of a month or so ago.

Volatility indices ($VIX and $VXO) have remained relatively
subdued as well.  That is bullish for stocks.

L M 8 9 vix

In summary, unless there is a breakdown by $SPX and some accompanying sell signals, the market can work higher over the near term.