By Lawrence G. McMillan
We have been writing commentary for months now, detailing the steepness of the $VIX futures term structure. But recently, it has risen to levels never seen before in the listed VIX futures markets (volatility derivatives began trading in 2004). In this article, we’ll look at the current situation, compare it to past extremes, discuss appropriate strategies, and see if there is any predictive value to these extremes.
By Lawrence G. McMillan
The bulls aren’t going to find a much better market than this one. Overbought conditions are worked off with minimal — almost “stealth” — corrections. Volatility remains low, while prices continue to rise. Support levels continue to build up along the way. And public opinion remains skeptical or even bearish in certain areas.
By Lawrence G. McMillan
In our daily letters and in last week’s hotline, we have written extensively about the “levitating act” that the stock market was performing. Essentially, it had gone from late December through this past Tuesday, while hovering above a number of standard indicators.
By Lawrence G. McMillan
The stock market decisively broke out to the upside on Tuesday, thereby confirming (in my opinion) that the volatile move we have been talking about would take place on the upside.
The equity-only put-call ratios are wavering around at more or less constant levels and aren't giving any clear signal right now. Market breadth hasn't been particularly great over the past three weeks, although it did revive enough this week to push the breadth indicators back onto buy signals.
By Lawrence G. McMillan
(Marketwatch) - Just a week ago, the market had its worst day of the year. The Standard & Poor’s 500 Index finally touched and even closed below its 20-day moving average, for the first time in 52 trading days.
By Lawrence G. McMillan
About this time last year, a popular study was released that showed the results of trading just the first trading day of the month. That is, buy “the market” at the close of the last trading day of one month and sell out your position at the end of the next day – the first trading day of the new month. In 2010, it was so successful that one could have captured 93% of the $SPX gain for the entire year by just being invested on 12 days – the first day of each month.
By Lawrence G. McMillan
A small market correction finally occurred this week, but it seems like it was nothing more than an opportunity for the bulls to buy at lower prices. $SPX once again established the 1340 level as support; in fact, it was a virtual trampoline as the index spurted higher after touching it on Tuesday.
Equity-only put-call ratios turned negative this week and remain on sell signals.
By Lawrence G. McMillan
For a market that has been rather dull and steady, there certainly seems to be a large number of interesting items to talk and write about. So, this week, we’re going to address a number of these because I think they could all be important at one point or another in the coming weeks and months, as this market tries to determine its major direction.
By Lawrence G. McMillan
The levitation act is over. History shows us that the market is about to become more volatile. However, the market move can be in either direction.
By Lawrence G. McMillan
The pressure that has been building is weighing more heavily on the market now. This will be the 10th day in the last 11 that “stocks only” breadth has been negative (unless there is a monster rally this afternoon). As a result, that breadth oscillators is approaching oversold territory. It’s been quite some time since anything has been oversold, as far as the major averages go.
