The market, as measured by $SPX, broke out to upside on October 5, and has continually added to its gains since then. That breakout turned the intermediate-term indicators bullish, and they mostly remain in that state.






The equity-only put-call ratios were the first indicators to turn bullish -- a little over a month ago. Now, the standard ratio is the first one to turn bearish, although the weighted ratio remains solidly on a buy signal.




Market breadth indicators are extremely overbought now, after the strong move since the upside breakout over $SPX 1150 occurred.




Finally, last week $VIX did collapse below 21, and traded down to just below 18 this week. This decline in $VIX confirms the intermediate-term bullishness of the $VIX chart.

 

In summary, the intermediate-term indicators remain bullish. However, resistance at 1180-1220 coupled with an overbought condition will probably cause some short-term pullbacks.


Lawrence G. McMillan is the author of two best selling books on options, including Options as a Strategic Investment, recognized as essential resources for any serious option trader's library.