The stock market wants badly to hit an all-time high. And the S&P 500 can get there.

Lawrence McMillan's analysis indicates a mostly bullish outlook for the S&P 500 (SPX), expecting it to challenge all-time highs at 6,150, supported by technical indicators like the breakout over the downtrend line and positive cumulative volume breadth; however, potential sell signals exist, including the McMillan volatility band and computer analysis of put-call ratios, which would be traded if confirmed, while specific options strategies on SPY and BKR are recommended with defined stop-loss levels.

Analysis

The S&P 500 (SPX) exhibits a predominantly bullish technical posture, with analysts anticipating a challenge to its all-time high of 6,150. This outlook is supported by a breakout above the downtrend line connecting February and May highs, with established support levels between 5,940 and 5,700. Cumulative volume breadth (CVB) has registered new all-time highs, a historically strong precursor to SPX achieving new peaks. Furthermore, the Cboe Volatility Index (VIX) dropping below 18 has triggered two buy signals: a "spike peak" signal from March 23 and a trend-of-VIX buy signal confirmed on June 9. Market breadth has also shown significant improvement, neutralizing previous sell signals, although breadth oscillators are now in overbought territory. Equity-only put-call ratios, while their descent has slowed, remain on buy signals, though computer analysis programs suggest underlying sell signals are forming. Conversely, a McMillan Volatility Band (MVB) sell signal remains active, which would be nullified if SPX closes above the +4σ band, currently at 6,100 and declining due to decreasing realized volatility. The "new highs vs. new lows" indicator is neutral. The term structure of VIX futures is mildly positive, while the Cboe volatility term structure is more bullish. Overall sentiment is strongly positive (0.75), aligning with the generally bullish technical picture, though contingent on the confirmation or negation of these mixed signals.

Key Decisions for Investors

• Consider maintaining a cautiously optimistic stance on the S&P 500, targeting a move towards 6,150, while closely monitoring the 6,100 level on SPX as a potential stop-out for the MVB sell signal.
• Evaluate opportunities in Baker Hughes (BKR) calls, given its double put-call ratio buy signal and breakout over resistance, supported by strong positive sentiment (0.8).
• Review existing options positions, implementing rolling strategies for in-the-money calls as suggested for SPY, APH, and TSEM, and consider exiting positions where sell signals have emerged, such as IEF puts, DLR calls (sentiment -0.6), and CCL calls (sentiment -0.6).
• Monitor VIX movements for potential changes to its buy signals; specifically, a close above 21 for two consecutive days would negate the trend-of-VIX buy signal for SPY calls, and a VIX rise of 3 points over one to three days would stop out the "spike peak" signal-based SPY call spread.