Weekly Market Commentary 6.13.14

As far as the $SPX chart is concerned, it has support at 1900.  In
fact, there is really support all the way down to 1860.  A close below
1860 would change things, turning the chart to a bearish state if that
were to happen.
lm 6 14 spx

Equity-only put-call ratios remain on buy signals.  The standard
ratio finally got in synch with the weighted ratio and
issued a buy signal a couple of weeks ago.

Market breadth (advances minus declines) was very positive on
the initial breakout over 1900.  That is desirable, for it shows that the
new bullish phase has plenty of support.  But breadth indicators
quickly reached overbought territory, though.  Now, after three days
of negative breadth, those overbought conditions have abated, but any
more negative breadth will generate sell signals from breadth.

Volatility indices ($VXST, $VIX, and $VXV) have all recently
fallen to extremely low levels.  These low levels would certainly have to be
considered “overbought.”  However, unless $VIX actually begins to
trend upward (we are currently viewing a $VIX close above 13 as
bearish), then stock prices can continue to rise.
lm 6 14 vix

In summary, the indicators are still generally bullish.
Hence we are intermediate-term bullish, understanding that the overbought
conditions can produce sharp, but short-lived pullbacks at any time.