$SPX closed above 2100 this week for the first time since last December. The Index chart remains bullish, with support at 2070 and 2040. There is multitudinous resistance between 2100 and the all-time highs at 2135, but this market hasn't had problems with resistance so far.
Equity-only put-call ratios remain on buy signals, even though they are mostly just moving sideways recently.
The stock market, as measured by the Standard & Poors 500 Index ($SPX), has gained 220 points in a month (since the September 28th lows). After such a strong advance in so short of a time, one would have to say that the market is overbought. Even so, actual sell signals have been hard to come by.
The $SPX chart itself remains bullish in that it is in a pattern of higher highs and higher lows, and the 20-day moving average is rising.
In nearly 45 years of trading, I don't think I've ever seen a market as wild as the one has been this month. Let's review the entire technical picture. First of all, the chart of $SPX has not yet returned to a bullish state. $SPX would have to trade at new highs (above 2080) in order to turn the chart bullish again.
The Fed’s announcement that they were not going to taper was a big sigh of relief for many traders, and the resulting buying explosion was powerful. Short covering was certainly prevalent as well. $SPX and other major indices blasted through to new all-time highs. In doing so, there were a number of overbought conditions that were triggered, but on such a powerful breakout, an overbought condition is actually conducive to higher prices – for a while.
Stock market bulls are keeping the upside pressure on, forcing short covering and other unwanted maneuvers from the bears’ point of view.
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.
By Lawrence G. McMillan
MORRISTOWN, N.J. (MarketWatch) — Ever since the stock market, as measured by the Standard & Poor’s 500 Index SPX broke down through support late last month (on Oct. 23), the bulls have been struggling to regain control.
By Lawrence G. McMillan
The Standard and Poor’s 500 Index (SPX) was under a reasonably large amount of pressure last week. By week’s end, it had declined to 1425 — a support level, right at the lower band of the bullish channel that has defined this rally that began in early June.
By Lawrence G. McMillan
As readers know, we have been bullish continuously since early June. Even as late as a week ago, it still seemed possible for this market to move higher over the short term. But recent events and indicator changes have put this short-term forecast into jeopardy.
By Lawrence G. McMillan
The stock market continues to mark time, not really declining much as it works off the overbought condition from a couple of weeks ago. It is still our opinion that once this short-term correction is over, higher prices will lie directly ahead.
