By Lawrence G. McMillan

During the last market decline (basically, during all of September and a little bit in October), $VIX just wasn’t too “worried” about the decline in stocks. Yes, one can see, from the chart of $VIX, that it had been slowly rising since the beginning of September, exactly in line with the downtrend in SPX which began at that same time. However, except for the one spike upward in mid-September, $VIX didn’t rise sharply. Perhaps if the decline in stocks had accelerated, $VIX would have responded better, but in reality, $VIX did not prove to be much of a hedge against losses in the stock market during this most recent stock market decline. This happens from time to time, the worst case probably being December 2018.

By Lawrence G. McMillan

For now, $SPX has tentatively found support near 4435. But that only occurred this week, so it is hardly seasoned or tested. The first truly tested support area is still the major one at 4370, and that is not too great of a distance from today's levels. As long as the support at 4370 holds, the bulls are still in control although it might not completely seem like it right now. A violation of that support area, though, would change things in a negative manner.

By Lawrence G. McMillan

After making a new all-time high on September 2nd, $SPX has failed to add to the gains. Perhaps the sideways movement is all the correction that this market needs, similar to what we saw at the end of July. Regardless, the $SPX chart remains bullish in that it is above support and all of its major trendlines are moving higher.

By Lawrence G. McMillan

There is nothing unusual about this week's market action. $SPX continues to rise after the brief pullback on August 16th to 19th. The NASDAQ-100 ($NDX; QQQ) is very strong as well and is making new all-time highs along with $SPX almost daily.

The major support level for $SPX is still 4370, although that is beginning to fade into the distance as the Index plows ahead. For now, we are still of the opinion that the $SPX chart is bullish as long as support at 4370 has not been violated.

By Lawrence G. McMillan

After bouncing off of support at 4370 last week (the third time that $SPX has found support at that level --meaning it is now extremely important support), $SPX rallied to new intraday and all-time highs. The NASDAQ-100 ($NDX; QQQ) did the same, but the Dow ($DJX) has lagged behind.

By Lawrence G. McMillan

The key to whether the market is bullish or bearish is $SPX support at 4370. Yesterday (August 19th), $SPX traded right down to that level and bounced from there again. That is the third time in less than a month that $SPX has bounced off of that level. Hence, it is valid and substantial support. If it gives way, there will likely be surge of selling. But as long as that support at 4370 holds, the $SPX chart is still bullish, with moving averages trending upward.

By Lawrence G. McMillan

Despite deteriorating internals in the market, $SPX plowed ahead to register a new all-time high on 13 of 14 consecutive trading days.  That streak was interrupted yesterday.  

By Lawrence G. McMillan

Leadership once again is in the $SPX Index, although the NASDAQ Composite  and the NASDAQ-100 ($NDX; QQQ) are strong as well. Since the $SPX chart is our primary indicator, we retain a "core" bullish position as long as $SPX holds  above support: 4260 (the early June highs), 4165, and 4060   the latter two being the twice-tested lows of June and May, respectively.  

By Lawrence G. McMillan

When $SPX broke out to new all-time highs in early June, it seemed labored, and that breakout quickly faded.  But now, in late June and early July, $SPX has moved to new all-time highs with more authority -- having closed at a new all-time high for the sixth trading day in a row.  

By Lawrence G. McMillan

The broad market ($SPX) has failed to convincingly break out to a new high, and now it is back below the old (early May) highs of 4238. A close below 4190 would indicate to me that the attempted upside breakout had failed.

Despite recent market weakness over the past four days, the equity-only put-call ratios remain on buy signals. The standard ratio (Figure 2) flattened out yesterday, but the weighted ratio continues to drop. These ratios will remain on buy signals as long as they are declining.