Weekly Market Commentary 6.6.14

If there were any doubts about the validity of the breakout to new all- time highs, they should be satisfied by now. $SPX has support at 1900, and then all the way down to 1860.

LM spx
The equity-only put-call ratios remain on buy signals. The
standard ratio had been lagging, but finally moved into the bullish column last week, joining the weighted ratio.

Market breadth was on the verge of sell signals this week, but
they did not occur. So, both breadth oscillators remain on buy signals.

Volatility indices ($VXST, $VIX, and $VXV) continue to remain
the subject of much debate and consternation amongst bloggers, media types, and traders — few of whom really seem to understand how these volatility indices work. The indices are very low. However, as long as volatility remains low, there is no danger. It’s when it begins to trend higher that trouble will be brewing for stocks. As long as VIX remains below 14, stocks should be able to continue to rally.

lm vix
In summary, the intermediate-term outlook is bullish. The
overbought conditions do exist, but they are not major. So any
correction would likely be short-lived.