However, the bullish tendency may not play out so dramatically this year. First of all, we are headed into the weakest days of the month, which this year correspond with options expiration week (more details here.
Second, volatility is rising, but has not yet entered a spiking stage. Although still at low levels, any rising trend should be taken as a warning sign when the markets have traded with such low volatility for so long.
Third, according to McMillan's research, weighted Put/Call ratios have moved to sell signals from extremely low levels. This is likely to signify SPX will struggle in the near term. Recent market leaders, Facebook and Netflix, P/C ratios rolled over to sell signals from very low levels this week. This will likely mean a change of leadership in the market going forward - potentially by oil stocks as they have been outperforming along with consumer staples and real estate stocks.
