The market has essentially been moving sideways, as it continues to trade within the channel in which it has been stuck for several months. The S&P 500 is trading at the top of its channel, and the jury is still out as to whether the indices will break out or break down. But, despite a strong session for the market on Thursday, my indicators continue to give neutral readings.

There are still some bearish signals of which to take note in the market. Most notably, the Dow Transportation Index (DJT) has eroded even further from last week. The Transports play a key role as a leading indicator, and this suggests that there may be some weak days ahead for the market.

I also play close attention to the Advance/Decline Index, which has turned negative.

We are seeing strength in commodities, which seem to have made a bottom and are turning up. Oil in particular is still holding above support, which resides at the $20 level on the United States Oil ETF (USO).

One of the major reasons we’re seeing this charge in commodities is that the U.S. dollar is starting to crumble. The dollar made a parabolic move some months ago, which is something that must be corrected. Given this development, this may be a good time to move more toward companies with international exposure, as domestic companies will not do as well in this weakening-dollar environment.

While things remain a little cagey domestically, European markets are starting to look better, with compelling first-quarter economic figures. Plus, right now, the U.S. labor participation rate is roughly 62%, which is at a nearly 40-year low and, thus, very poor. The participation rate in Britain, for example, is 74%, which tells me Europe is looking stronger.

For now, while I personally lean toward a bearish stance, I will let the market tell me what to trade. While sectors like retail look to be weakening, the technology sector continues to hold this market up.

One such play that looks attractive right now is International Business Machines Corp. (IBM), the legacy tech company with operations in 170 countries.

Buy the IBM July 185 Calls (IBM 150717C00185000) at $1.00 or lower. After entry, take profits if the stock price hits $177.70 or the option price hits $2.60. Exit if the stock price closes below $167.50.

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