All of the major averages have made new all-time highs this week: $SPX (SPY), $DJX (DIA), $NDX (QQQ), and yes, even $RUT(IWM). In fact, IWM is outperforming the rest at this time, for the first time in a long while.
As we have shown, there is a massive number of overbought put-call charts and just a general level of extreme speculation in the current market. In late 2017 and 2019, conditions were similar and they persisted into February before the market collapsed. The market is rarely so accommodating as to keep repeating itself, so while I definitely feel that a major correction could occur, I would expect our indicators to get ahead of that. But just in case something comes out of the blue, this strategy is designed to generate large gains in a collapsing market, at only a small cost if that does not happen.
Join Larry McMillan as he discusses the current state of the stock market on Monday, December 7th, 2020.
Over the past three days, $SPX finally managed to break out to new all-time closing and intraday highs. Thus, the $SPX chart is bullish, as there is no classical resistance -- by definition -- when it is at all-time highs.
$SPX has advanced an astonishing 1,500 points, or 68%, from the March lows. No matter how you interpret that, it does not jibe with the economics caused by COVID-19. But TINA and FOMO are formidable proponents of buying stocks, and they have certainly won the day.
Join Larry McMillan as he discusses the current state of the stock market on Monday, November 30th, 2020.
The stock market came into the Thanksgiving holiday in a very strong fashion -- continuing the strong rally that has taken place throughout November. A move above 3644 would be into new all-time intraday high territory. Once $SPX makes that move, there is no resistance in the traditional sense.
Meanwhile, on the downside, there is support just above 3500. A close below there would be very negative, for it would place $SPX back within the old trading range.
Join Larry McMillan as he discusses the current state of the stock market on Monday, November 23rd, 2020.
The broad market, as measured by $SPX, finally reached a new all-time closing high this week, at 3626 on Tuesday, November 16th. It was unable to hold that level and has now fallen back a bit. In fact, it has closed back below the old September highs of 3588. That in itself is not a problem, but if $SPX were to close below 3500, that would be bearish.
We have continually been talking about how low the equity-only put-call ratios have been this year – first in January when they dropped to the lowest levels since levels since 2014, but then again in August when they dropped to the lowest levels in our database, which goes back to 2001.
Join Larry McMillan as he discusses the current state of the stock market on Monday, November 16th, 2020.
