fbpx Intermediate-term Indicators Bullish | Option Strategist

Intermediate-term Indicators Bullish

By Lawrence G. Mcmillan

Friday wound up one of the strongest weeks in stock market history. It was a perfect storm of events, topped off by a pre-holiday, thin trading session on the first day of the month. There are now some fairly extreme overbought conditions in the breadth oscillators. However, as we’ve explained before, these are actually bullish conditions for the new upside breakout. Of course, in the very short term, the market needs to slow down a bit and regroup.

The move in $SPX on Friday clearly broke through the downtrend that had been in force since early May. While there is still resistance at those May highs (1370), this market should be able to overcome that and activate targets north of 1400 in the next few months. Equity-only put-call ratios are on buy signals, and since those are coming from high points on their charts, they indicate that there is quite a bit of room for those buy signals to operate before one need worry about “too much” call activity taking place.

$VIX was only off fractionally on Friday, but it did close below 16. So that is another overbought condition... 

To read the rest of this market commentary, subscribe to McMillan's Daily Volume Alerts.

Share this

Option Strategist
Blog Search

Recent Blog Posts

Trading or investing whether on margin or otherwise carries a high level of risk, and may not be suitable for all persons. Leverage can work against you as well as for you. Before deciding to trade or invest you should carefully consider your investment objectives, level of experience, and ability to tolerate risk. The possibility exists that you could sustain a loss of some or all of your initial investment or even more than your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and investing, and seek advice from an independent financial advisor if you have any doubts. Past performance is not necessarily indicative of future results.
Visit the Disclosure & Policies page for full website disclosures.

-->