By Lawrence G. McMillan
For a considerable period of time, $SPX refused to break down. From the June lows to the October highs, the trend was steadily upward as $SPX traded in a bullish channel. However, that channel was broken on Tuesday of this week, when $SPX broke through it and also broke through support at 1425-1430. This has changed the $SPX chart from bullish to, at best, neutral. Those who want final confirmation would also require a breakdown below the August lows at 1395. That would confirm an intermediate-term bearish outlook for stocks.
By Lawrence G. McMillan
A week ago, stocks seemed to be on the brink of breaking down. But the bulls regrouped, and $SPX rallied strongly off of that support base. Hence, the 1425-1430 area is now stronger support than ever.
Equity-only put-call ratios are the most bearish indicator of the lot. They continue to rise rapidly, after having given sell signals last week. Since they are still rising, they are still on those sell signals.
Market breadth indicators are hovering right on the edge of sell signals.
By Lawrence G. McMillan
MORRISTOWN, N.J. (MarketWatch) — The stock market has generally been declining since September 14th — the day after the Fed announced the latest round of Quantitative Easing.
Not only was the market overbought at that time, but the Fed’s announcement was widely anticipated news.
By Lawrence G. McMillan
$SPX rallied strong yesterday, bouncing off the support at 1425-1430, and that support was/is bolstered by the rising trendline at the bottom of the trading channel that has defined this bull market since June. The buying accelerated late in the day, and it seemed as if the bears were capitulating to some extent. Overnight, S&P futures have been strong again – gaining another 7 points in Globex trading.
By Lawrence G. McMillan
We have been bullish continuously since early June. But recent events and indicator changes have put this short-term forecast into jeopardy.
$SPX has support at 1430 from two downward probes in September. This week, that has also been the low. Hence, it has become important support.
One of the more negative developments is the fact that both the standard and the weighted equity-only put-call ratios are on sell signals now.
By Lawrence G. McMillan
The stock market continues to mark time, in the wake of the massive overbought condition that arose on September 14th -- right after the Fed announced the latest round of Quantitative Easing. This type of action will, in my opinion, lead to a rally to new highs.
$SPX remains well within the bullish channel that has defined this market since the early June lows.
By Lawrence G. McMillan
The broad market, as measured by the S&P 500 Index ($SPX) remains in a bullish uptrend. The recent selling has drawn the index down from the top of the bullish channel that has defined this uptrend since early June (see Figure 1), but it only pulled back about halfway through the channel.
Equity-only put-call ratios are mixed. The standard ratio (chart, above left) continues to decline nearly every day. Thus it remains on a buy signal. The weighted ratio has now curled upward and is marked as a sell signal.
By Lawrence G. McMillan
The stock market continues to be resilient, if dull. The bears have not been able to force prices downward, despite what was a very overbought condition a week ago.
Equity-only put-call ratios remain bullish. Both the standard and weighted ratio have now made new lows for this recent move, and that confirms their buy signals.
By Lawrence G. McMillan
Yesterday's market was one of the quietest days so far. $SPX had a total range of 5.34 points for the entire day. That is minuscule. In recent months, this sort of action has only been a precursor to further upside movement – and it wouldn't be surprising to see it happen again. Of course, there are still overbought conditions, but we would expect any correction to be short-lived and probably contained by support at $SPX 1430-1440.
By Lawrence G. McMillan
The stock market continues to march higher, listening to its own bullish rhythms and eschewing the potentially bad news that has kept many investors on the sidelines.
Today's rally has taken $SPX all the way up to the upper band of the bullish channel that has defined this market since early June. That in itself is an overbought condition of sorts. Today's highs also exceed the late 2008 highs, so the next target is the late 2007 highs, near 1500.
