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Weekly Commentary 1/6/2012

By Lawrence G. McMillan

The stock market finally was able to take advantage of the favorable seasonal pattern and break out to the upside.  It is now imperative that $SPX take out the October highs at 1293.  It would be bearish if $SPX closes back below 1260.      

Equity-only put-call ratios remain on buy signals.      

Market breadth (advances minus declines) has been acceptable but not strong.  This is a potential problem, and is one of the few negative divergences.      

S&P 500 returns to critical 1,260 level

By Lawrence G. McMillan

MORRISTOWN, N.J. (MarketWatch) — The Standard & Poor’s 500 Index is hovering near 1,260 once again. What makes this significant is that this is the area not only of the 200-day moving average of the Index, but it is also the point where the index meets the downtrend line connecting the recent market tops.

Weekly Commentary 12/30/2011

By Lawrence G. McMillan

The Standard and Poors 500 Index ($SPX) is hovering near 1260 once again.  What makes this significant is that this is the area not only of the 200-day moving average of the index, but it is also the point where the index meets the downtrend line connecting the recent market tops. A close above 1270 would be a clear upside breakout.

Both the standard equity-only put-call ratio and the weighted ratio are on buy signals.

Larry McMillan's 2012 Market Forecast

By Lawrence G. McMillan

...We still expect a bear market to unfold – one that will be far more severe than what we’ve seen in the last few months (although perhaps not so volatile).  It is likely that the next bear market will take out the 2009 lows, thereby souring an entire generation (or two) on stock ownership for much of their lives – as happened with investors in the 1930's.

Weekly Commentary 12/23/2011

By Lawrence G. McMillan

Tuesday's big rally was enough to swing things over to the bullish camp, heading into the year-end. The continued bullishness has carried the market to the point where it has now reached the traditionally bullish Santa Claus rally time frame: the last five trading days of one year and the first two of the next.      

The $SPX chart is confined by two trend lines (Figure 1).  A breakout through either trend line should propel a sizeable move in the same direction.      

2011 Market Review & 2012 Forecast

By Lawrence G. McMillan

With this newsletter, we have reached 20 full years of publication.  Hopefully, there will be 20 more!  As far as the stock market goes, it was a pretty wild year, but not necessarily out of character with the ever-increasing volatility that the market has exhibited much of the time in recent years.  Ever since the manipulated interest rate environment and accompanying bull market of 2006, where $VIX repeatedly dipped below 10, markets have been volatile.  It began with the volatility explosion in February 2007 and continues to this day.

$VIX December Settlement

By Lawrence G. McMillan

The $VIX settlement occurred this morning (Wednesday, 12/21/2011) at the opening.  It was a rather unusual settlement - something we've not really see before.  Yesterday (Tuesday), at the close of trading, $VIX was 23.22, but the December $VIX futures settled at 23.80 – a 58-cent premium.  The two, by definition, converge at the "a.m." settlement at Wednesday's opening.  This in itself is a bit unusual, seeing that large of a premium with essentially no trading time remaining.

The Modern Era of Portfolio Protection Video

In this video recorded at the TradersExpo Las Vegas, Lawrence McMillan, founder of McMillan Analysis, explains why VIX derivatives are the superior form of portfolio protection.

Click here to visit MoneyShow.com and watch the video

Released: 11/29/2011 
Focus: Portolio Protection 

Weekly Commentary 12/16/2011

By Lawrence G. McMillan

Rather heavy selling over the past six days (with the exception of last Friday) has resulted in a deeply oversold condition.  That should produce a short-term rally, but after that the picture is far less rosy.

The bigger picture in $SPX shows two converging trendlines: a rising trendline connecting the October and November lows, and the declining trendline connecting several tops since July (which is near the 200-day moving average a major provider or resistance to date).  Both are significant.

The market moves swiftly but goes nowhere

By Lawrence G. McMillan

MORRISTOWN, N.J. (MarketWatch) — Despite plenty of volatility, the stock market – as measured by the Standard & Poors 500 Index — has been unable to break out of its rather wide trading range. That might remain the case for the remainder of this year, but it is likely that early 2012 will see a significant move.