$SPX touched support and its rising 20-day moving average at 1310, and probed slightly below that level today before rallying.
Perhaps more interesting is the fact that the equity-only put-call ratios have remained on buy signals throughout the pullback over the last week.
There was similar action in the volatility indices ($VIX and $VXO). The calm in these volatility indices is another bullish indication, despite the falling broad market.
Only breadth is giving a negative signal at this time.
In summary, the bears have growled a bit this week, but the market has pulled back to its rising moving average in an orderly fashion -- alleviating its overbought breadth condition -- while the other intermediate-term indicators remain positive. This is a positive combination from our point of view.
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.
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