By Lawrence G. McMillan
The Standard & Poors 500 ($SPX) chart (Figure 1) still shows heavy resistance at 1390. That level has been challenged on five of the last six trading days. So far it has held, thus making it a very strong resistance area.
Equity-only put-call ratios remain on sell signals, which originated a week ago. These ratios are now climbing their charts swiftly, solidifying those previous sell signals.
By Lawrence G. McMillan
This market has seen a large increase in volatility in the last month or so, but this volatility has been accompanied by another characteristic: there is no follow-through to these volatile moves.
By Lawrence G. McMillan
Volatility has returned with a vengeance. The bulls are very excited about the rally of the last two days. Perhaps they are correct in their euphoria, but we don't yet see it in the technical evidence. The violation of the 1390 support level this week turned the $SPX chart negative. something quite serious, but it if holds, that would be bullish.
When the market broke down on Monday through the 1390 support level, several other technical indicators turned bearish as well. First and foremost were the equity-only put-call ratios.
By Lawrence G. McMillan
In the last issue, we mentioned, on page 8, that the Composite Implied Volatility (CIV) indicator was on “sell alert.” Then in last week's Hotline update, we verified that a CIV sell signal had indeed occurred. It has proven to be a timely signal. This is an indicator that not many people are familiar with, so we will review the definitions and data that comprise the indicator.
By Lawrence G. McMillan
After some minor selling last week, the Unemployment Report was used as an excuse for some heavy selling on Monday. Since the report came out when the market was closed (what poor methodology!), the stock market had the whole weekend to worry about things.
By Lawrence G. McMillan
In this morning’s comment (in the Volatility Report), it was shown that several of the other indicators had turned negative as of yesterday’s close. That foreshadowed the selling we’re seeing today – the most negative day since last November (at least at this point). The heavy selling today has seen $SPX slice right through the supposed support at 1370, creating the very real possibility of another test of the 1340 area.
By Lawrence G. McMillan
The stock market has run into a little trouble this week. Things started out well enough, with a strong rally on Monday taking $SPX to new post-2008 highs. However, selling has commenced since then, fueled by several factors: an overbought condition, more poor news out of Europe (concerning Spain), the FOMC minutes which were released on Tuesday and appeared to indicate that the Fed is not planning on any quantitative easing in the near future, and now the Unemployment Report.
By Lawrence G. McMillan
The Standard & Poor’s 500 Index pulled back sharply over the last two days. Ostensibly, this is in response to the FOMC minutes that were released yesterday, in which the Fed seemed to indicate that it was not considering another monetary intervention (“QE3”) at this time. That shook all markets, including stocks, but especially gold.
By Lawrence G. McMillan
After a rousing start to the week, with $SPX breaking out to new post- 2008 highs, some selling has set in. To date, the selling has been modest and falls into the category of a "garden variety" correction. However, if support at 1385-1390 on $SPX fails, that would be bearish.
Equity-only put-call ratios remain neutral to slightly bullish. Breadth has been the "weak sister" of indicators for some time. The breadth indicators are currently on sell signals -- the sixth such.
By Lawrence G. McMillan
MORRISTOWN, N.J. (MarketWatch) — Despite the occasional overbought condition, the stock market – as measured by the Standard & Poors 500 Index — continues to plow higher. Considering that support levels keep building up below the market, and that overbought conditions rotate out without any major damage to the bullish market, it is clear that the bulls are still in charge.
