Last Monday, the COVID-19 vaccine new caused $SPX to gap up 135 points on Monday's open. That was the largest percentage gap to a new all-time high in history.
As traders know, there's an old adage to "sell the news," especially if there has been anticipatory buying before "the news." And they did, drving $SPX back inside its 3200-3600 trading range.
Join Larry McMillan as he discusses the current state of the stock market on Monday, November 9th, 2020.
Election-related or not, the move from the bottom to the top of the $SPX trading range in just four trading days was impressive. The trading range extends from 3200 to nearly 3600 (the all-time highs at 3588). The recent moves have pretty much obliterated what had been a support and resistance area near 3400-3430, so the edges of the range itself are the only meaningful support and resistance currently.
Join Larry McMillan as he discusses the current state of the stock market on Monday, November 2nd, 2020.
The selling that began with a modest overbought condition on October 12th has snowballed into a major decline, capable of testing whether or not a bull market still exists. Now the only remaining near-term support area is at 3200. If that gives way, a pattern of lower highs and lower lows will be in place, and that is the mark of a bear market. That would be a game- changer.
Join Larry McMillan as he discusses the current state of the stock market on Monday, October 26th, 2020.
The pullback in stocks over this past week closed the third and final gap of the Oct 10th-12th buying spree, and $SPX came all the way back down to the breakout level of 3425-3430. It has bounced off of there for now, and so this might merely be a sort of classic pullback to test support and then move higher. As long as $SPX remains above 3400, its chart has a bullish slant to it.
One of our favorite seasonal trades – and one of the most rewarding – is the October Seasonal Trade. It will be coming up at the end of October. It calls for buying “the market” on October 27th and selling out your position on November 2nd . BUT...the trade is only taken if there has been a 3.2% or larger decline sometime during the month of October. So far, we don’t have that last criterion satisfied, but it’s still early in October.
There has only been one contested election since listed options have been trading – the 2000 election between George W. Bush (43) and Al Gore. Election day was November 7th, 2000. The accompanying charts, courtesy of tradingview.com, show the pertinent time period. The three months August, September, and October “+” – as shown in the table at the beginning of this article – are noted in blue on the $SPX chart of 2000. There had been a good rally in August, but that had been completely reversed by mid-October. Then a late October rally brought $SPX back almost exactly to where it had been on July 31st – meaning that the three-month period was essentially a “wash.”
Join Larry McMillan as he discusses the current state of the stock market on Monday, October 19th, 2020.
