Why this stock-market breakout is the real deal — and the S&P 500 still has room to run

Lawrence G. McMillan's analysis indicates the S&P 500's current breakout to new all-time highs is robust and sustainable, contrasting with February's failed rally. This bullish assessment is underpinned by strong market internals, including positive equity-only put-call ratios, broad market breadth, and cumulative volume breadth reaching new highs. Declining realized and implied volatility, coupled with VIX seasonality suggesting continued low volatility into July, further support a generally bullish market stance, leading to specific strategic recommendations.

Analysis

The S&P 500's current breakout to new all-time highs is assessed as fundamentally stronger than the failed rally in February, supported by a confluence of bullish technical indicators. Key support for the index is identified at 6,150, with the current upward trend expected to hold. Market internals provide robust confirmation of this strength; both equity-only put-call ratios and breadth oscillators have shifted to overbought buy signals, a positive sign in a market hitting new highs. Furthermore, cumulative volume breadth (CVB) has registered new all-time highs on five of the last seven trading days, and the number of NYSE new 52-week highs has triggered a separate buy signal. The volatility environment is equally constructive, with realized volatility (HV20) falling to 10% and implied volatility (VIX) declining, keeping existing VIX-based buy signals intact. The upward-sloping term structure of VIX futures, trading at a significant premium to the spot VIX, reinforces the bullish outlook for equities and presents a strategic opportunity to short volatility, as recommended through the inverse ETF SVXY. Specific event-driven situations, such as the M&A speculation surrounding Core Scientific (CORZ), are also noted for creating high-volume trading opportunities.

Key Decisions for Investors

• Given the broad-based confirmation from market internals and volatility indicators, maintain a bullish stance on the S&P 500, viewing any pullbacks to the 6,150 support level as potential buying opportunities.
• Consider strategies that capitalize on the high premium in VIX futures and seasonally low volatility, such as initiating long positions in an inverse VIX ETF like SVXY or establishing long volatility positions in July ahead of a potential seasonal increase in late summer.
• For portfolios with a higher risk tolerance, evaluate speculative, event-driven opportunities such as Core Scientific (CORZ), where M&A rumors are driving significant volume and potential price appreciation, justifying the use of long call options despite their high premium.
• Actively manage existing long equity positions by rolling profitable, in-the-money calls up to higher strike prices to secure gains while preserving upside exposure in a continuing bull market.