By Lawrence G. McMillan
The Standard & Poors Index ($SPX) broke out of the triangle that had formed, and that breakout was strongly on the upside. The bears had plenty of chances to violate the support at 2040 on a closing basis, but were unable to do so. So now we’ll see if the bulls can do better with their chance.
Anecdotally (meaning I don’t have hard evidence, but I feel this is true), it seems that many of the big hedge fund managers and even the major banks are all bearish. Contrarily, then, the market will go higher.
The equity-only put-call ratios are mixed. The standard ratio rolled back down this week, thereby generating a buy signal. However, the weighted ratio continues to move higher, thus remaining on a sell signal.
Market breadth improved this week, and both breadth oscillators are now on buy signals, and are in modestly overbought territory.
Volatility continues to be a positive for stocks. As long as $VIX is not trending higher, stocks can continue rise.
In summary, the onus is now on the bulls to prove their worth. But with the indicators mixed, $SPX would have to break out to new highs to scare the bears. Otherwise, $SPX remains in a very wide trading range.