The bulls were encouraged this week by a rally back towards the 1100 level on $SPX. However, resistance proved to be strong there, and the market has now fallen to the top of a support level, near 1070. There is actually a slightly wider trading range in effect, with resistance at 1120-1130 and support at 1060.
The equity-only put-call ratios are each on a sell signal.
Market breadth was quite negative on Thusday. This indicator has returned to a sell signal.
Volatility indices ($VIX and $VXO) are in a trading range as well. Intraday highs and lows have bound $VIX moves to the 22-28 range.
In summary, until $SPX at least breaks out of the 1060-1100 trading range, directional positions are not warranted.
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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