By Lawrence G. McMillan
I would expect $SPX to finally make a new all-time high soon. $SPX has support near 1530, which is also where the rising 20-day moving average currently is.
Equity-only put-call ratios continue to be mixed, with heavy call volume chasing the rising market, but heavy put volume in the form of protective put purchases. These two are nearly canceling each other out.
Market breadth continues to remain overbought and on buy signals.
By Lawrence G. McMillan
If there wasn’t such incessant media coverage today, one might have a somewhat different opinion of what’s happening in the current market. I say this with some degree of experience, having seen the early 1973 market firsthand.
By Lawrence G. McMillan
So, that’s what passes for a “down day” nowadays? S&P futures were down for most of the day, but only about 7 points at their worst. But, as has been the case most of the time recently, those losses were regained by the end of the day. In fact, the Dow ($DJX) recovered all its losses, as it continues to handily outperform $SPX. Overnight, prices tried to retreat again (modestly), but retail sales data was positive this morning, so now the S&P futures are trading slightly higher on Globex.
By Lawrence G. McMillan
With the Dow ($DJX) making new all-time highs, and the Standard & Poors 500 Index ($SPX) simultaneously making new post-2007 highs, it certainly seems that higher prices lie ahead.
Both of the equity-only put-call ratios are somewhat distorted. That is because of all the put buying that has been taking place as protection for stock portfolios. At the current time, they are moving lower and thus appear to be back on buy signals.
By Lawrence G. McMillan
MORRISTOWN, N.J. (MarketWatch) — With the Dow Jones Industrial Average making new all-time highs yesterday, and the Standard & Poor’s 500 Index simultaneously making new post-2007 highs, it certainly seems that higher prices lie ahead.
Despite this price momentum, not everything is as bullish as one might suspect. We’ll look at the various indicators in depth to see how they line up.
By Lawrence G. McMillan
The quiet sleep-walking phase of the market seems to have ended, although that doesn't mean that the bulls have relinquished control. The chart of $SPX has widened out a bit, with support at the weekly low of 1485 and resistance at last week's highs at 1530.
One set of indicators that is bearish is the equity-only put- call ratios. As you can see from Figure 2 and 3, the ratios began to climb last week and are still rising, despite the market's rally this week. A rising put-call ratio is bearish for stocks.
By Lawrence G. McMillan
$SPX has closed below 1495 and $VIX has closed (way) above 16.21, so those are sell signals on both charts. Moreover, both equity-only put-call ratios have rolled over to sell signals as well. In addition, the CIV sell signal arrived, as the average stock’s CIV has risen to the 23rd percentile (well above the 17th percentile, which is what was required for the sell signal). There are other negatives as well – such as the major negative reversal that the market underwent on Monday (or, if you prefer – a outside down day).
By Lawrence G. McMillan
On Friday, we said that if the bulls could hold onto the opening gains throughout the day, then last week’s action would likely be viewed merely as a very short-term correction. Not only did they hold onto those gains, but they closed prices at the high of the day. Then, Sunday night, the bulls kicked in with another rally, pushing S&P futures up 7 points (or more) overnight. This is strong action, but a close above the highs at 1530 is needed to completely reaffirm that the bulls are back in control.
By Lawrence G. McMillan
Some of the stock market boredom has ended, as a number of traders took the Fed Minutes on Wednesday as a sign to do some selling (the Fed apparently discussed that -- some day -- the easing would have to end; personally, I don't think it will end in the foreseeable futures (years), but that's just my opinion).
$SPX has pulled back to the 1495 support level, which is also where the 20-day moving average currently is. This is a normal pullback, in terms of the $SPX chart. But a close below 1495 would be negative.
By Lawrence G. McMillan
The market continues to sell off today, extending what began shortly after the Fed minutes release yesterday afternoon. This morning's economic numbers provided no relief with unemployment claims and the Philly Fed index numbers coming in worse than expected. The gap lower and open at the high are very weak signs in terms of price action, though it will take a close below $SPX 1495 to confirm a bearish outlook in terms of price alone.
