By Lawrence G. McMillan
Just over a week ago, $SPX was probing the upper end of the trading range, a few days after a strong rally on Veteran's Day. But upside momentun slowed, and selling set in. Since then, the selling has fed on itself with ample aid from a series of unsettling news:
1) the continuing European debt crisis
2) the lack of results by the Super Committee
and 3) the MF Global bankruptcy.
By Lawrence G. McMillan
It just doesn’t seem that this market can put a rally together. There were two attempts to do so this morning, and both failed. Yet, when $SPX probed below 1180, a strong buy program arose. So there are buyers around, but the aren’t likely taking positions to hold, merely to trade.
By Lawrence G. McMillan
The bears seized control with heavy selling over the past two days. However, all is not lost, but the bulls certainly squandered what could have been a good opportunity. The $SPX lows today were 1209, with a close at 1216. This is just barely clinging onto the old support range (1215-1230). A rally from this level would be viewed as just another probe to the lower end of the wider trading range.
By Lawrence G. McMillan
MORRISTOWN, N.J. (MarketWatch) — When the stock market, as measured by the Standard & Poor’s 500 Index, broke out over 1,220 about a month ago, it was a strong bullish signal. Most of the technical indicators agreed by registering intermediate-term buy signals as well.
By Lawrence G. McMillan
For the second week in a row, a rising market was blindsided by negative "macro" news out of Europe and suffered a violent downturn as a result. What has been quite astonishing is the speed with which the last two declines have occurred. When all is said and done, though, support at $SPX 1215-1220 is still in place.
The equity-only put-call ratios are clinging to their buy signals. Market breadth continues to swing wildly from day to day. Most recently, it is back on a buy signal.
By Lawrence G. McMillan
Yesterday was a strong day, backed by technical factors across the board. But forget about it, because tonight the market is getting absolutely crushed. S&P futures we down as much as 32 points, and are down about 26 right now. The problem? Italian interest rates are rising dramatically – particularly noticeable, apparently, on the 10-year notes. The media is saying that the Italian bonds yields are a "crisis levels," whatever that means.
By Lawrence G. McMillan
Velocity. That’s a term more commonly found in physics or aeronautical engineering or something like that, but stock market participants are becoming all too familiar with the word, even if they have no idea what v = Δx/Δt means. Volatility is a measure of the size of market movements, but velocity is just the raw directional speed with which they occur. After observing the market this week, I am more inclined to call what we are seeing as velocity, and not volatility.
By Lawrence G. McMillan
When the dust has settled, this looks like little more than a pullback from a slightly overbought condition to test the breakout level (at 1220). To sum up the $SPX chart: there is still support at 1220, and as long as that holds, it's a bullish chart.
Equity-only put-call ratios have remained on buy signals all week, despite the heavy selling earlier in the week.
Also, the breadth oscillators are back on buy signals once again.
By Lawrence G. McMillan
Monday and Tuesday had all the earmarks of panic selling, but it has shaken the confidence that had been gathered throughout the strong October rally.
By Lawrence G. McMillan
Today’s move saw $SPX blow right through the resistance at 1260 and also through the 200-day moving average at 1272. Those are both significant levels to have overcome. The market may have to spend some time around the 200-day moving average, as it often does when it passes through that level, but the next higher targets of 1310 and then the yearly highs at 1350-1370 should be within range fairly soon.
Equity-only put-call ratios remain on buy signals.
