Weekly Market Commentary 2.28.14

The broad market, as measured by the Standard & Poor’s 500 Index ($SPX) has finally managed to close at a new all-time high.   A second day closing above 1850 would solidify the breakout and give it more credence.

lm 2 28 spx

Equity-only put-call ratios have finally rolled over to buy signals.

Market breadth has been strong all month. As a result, the
breadth indicators remain on buy signals, but they are in deeply overbought territory.

Volatility indices ($VIX, $VXO, and $VXST) have remained at low levels.  As such, they are overbought.  But just as the market can advance when breadth is overbought, so can it advance when volatility is “overbought.”

lm 2 28 vix

In summary, the breakout above 1850 is positive, especially if it can hold these levels for a second consecutive day.  There are no sell signals from our indicators.   LM