By Lawrence G. McMillan
The main feature of the current market is high volatility. Even though $SPX has been contained within essentially an 80- to 100-point trading range (bound by 1100-1120 on the downside to 1200-1220 on the upside) for weeks now, the speed with which it runs from one end of the range to the other has kept volatility measures high.
Equity-only put-call ratios are beginning to look more negative. The weighted equity-only has rolled over to a sell signal. The QQQ ratio has already rolled over to a sell signal, too.
By Lawrence G. McMillan
The market has quickly become extremely oversold again, and thus short-lived rallies are possible. In the bigger picture, bears see a break of the recent uptrend dating back to early August. Bulls see a successful retest of the lows. A move to new lows below 1100 will prove the bears right; otherwise, the bulls still have a chance to rescue the market.
The equity-only put-call ratios have been on buy signals for a few weeks but they are beginning to weaken now.
By Lawrence G. McMillan
For now, $SPX is working its way higher -- towards resistance at the 1240-1260 level.
Equity-only put-call ratios generated buy signals recently, and have generally been declining (bullish) ever since.
Breadth indicators are on buy signals, too. They have reached modestly overbought levels now, after having been deeply oversold a week ago.
By Lawrence G. McMillan
Today’s stock market action is very much like last Friday’s. There is heavy selling, and it doesn’t appear that buyers have much desire to buy before the weekend. Last week, there was a rally attempt at 3pm (Eastern time), but it eventually failed, and prices closed on the low of the day. If you’ll recall, last week the selling continued on into the afternoon of the first trading day of the next week, before a strong rally surfaced. That could well be the case again this week.
By Lawrence G. McMillan
The chart of $SPX has developed a very interesting characteristic: there is a rising channel -- called a "pennant" on the chart. A breakdown below the lower boundary of the channel creates a very negative technical formation.
Equity-only put-call ratios, meanwhile, are quite bullish. They rolled over to buy signals last week and continue to decline.
By Lawrence G. McMillan
The stock market has been swinging back and forth in wide ranges, moving from deeply oversold to deeply overbought and back again with extreme moves.
By Lawrence G. McMillan
Buyers finally emerged yesterday afternoon and they have continued into today. In my mind, the complete impetus for this rally was the severe oversold condition that had emerged over the previous three days of heavy selling. Today’s rally is on track to being a “90% up day” – certainly in terms of “stocks only” data and potentially in terms of NYSE-based data as well. At the current time, on the NYSE, advancing volume is 12-to-1 over declining volume.
By Lawrence G. McMillan
Technical indicators have turned more bullish in the past week, so the current rally probably has more room to run. The chart of $SPX has taken on a slightly more bullish tone. This week $SPX overcame resistance at 1200-1210, although it has now fallen back below that level.
There is also resistance at 1230 -- the intraday high of both the last two trading days.
By Lawrence G. McMillan
MORRISTOWN, N.J. (MarketWatch) — After Federal Reserve Chairman Ben Bernanke’s speech last Friday, the market sold off rather sharply. But once that selling got out of the way, a strong bullish move took place, carrying the Standard & Poor’s 500 Index higher by more than 70 points in just over one full trading day.
By Lawrence G. McMillan
The S&P 500 Index ($SPX) has established 1120 as a support area, but it remains negative in that it is trending downward.
Equity-only put-call ratios are still rising on their charts, meaning they are still on sell signals. However, the heights they have reached means that these indicators are extremely oversold.
Market breadth has been very one-sided, as massive numbers of traders are either bullish or bearish at the same time, it seems. Breadth conditions are currently neutral.
