Free Weekly Stock Market Commentary 8/21/26
By Lawrence G. McMillan
A week ago, it seemed that $SPX had a renewed upside momentum, as it was making new all- time highs and internal indicators were improving. But there has been no follow-through this week, and it seems that bullish momentum has been lost. The "culprit" seems to be an increase in T-Bond rates, although that hasn't mattered much before.
Even so, the $SPX chart remains positive as long as $SPX remains above support at 7600-7620 (the previous all-time highs). The pullback this week nearly reached that level and was a minor test of that support.
There is now resistance at 7744 (where a gap was closed on the $SPX chart) as well as resistance at the current all-time highs just above 7800.
As we review the next categories of indicators -- what we call the market internals -- you will see that each one has vacillated and is not that stable.
First are the equity-only put-call ratios. They rolled over to buy signals a week ago, and those buy signals are still in effect. However, the standard ratio has not retreated far from its local maximum of last week, and if it moves back a new high, that will stop out its buy signal.
Breadth is a category that has struggled. Breadth has been quite negative this week. That negativity has been reflected in both NYSE and "stocks only" terms. The NYSE-based breadth oscillator has been on a sell signal for some time. In addition, this week's action has produced a sell signal from the "stocks only" breadth oscillator as well.
However, the indicators surrounding $VIX are much more bullish for stocks. $VIX continues to close below its 200-day Moving Average. Hence the trend of $VIX buy signal for the stock market remains in place.
In summary, the $SPX chart remains positive, but the only support it's getting currently is from $VIX and its related indicators. A close below 7600 would be very negative. Otherwise, the internal indicators are presenting a mixed picture. We will continue to trade confirmed signals and will continue to roll deeply in-the-money options.
$TVIX$ $UVIX$ $DECP$ $DECU$ $DFUS$ $FLAO$ $MSTB$ $OCTQ$ $QQQY$ $SPUU$ $WDTE$ $XDTE$ $ZHDG$ $ATTR$ $ODTE$Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
