By Lawrence G. McMillan
For nearly two weeks, the market – as measured by the S&P 500 Index – had mostly declined. From a high of 1,261 on Dec. 7, the index fell to nearly 1,200 by last Monday, Dec. 19. As one might imagine, such a decline created an oversold condition.
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.
By Lawrence G. McMillan
The oversold conditions, coupled with some positive news out of Europe, created a buying vortex yesterday. This was so strong, that it was (of course) a true "90% up day" in "stocks only" terms and a "90% up volume day" in NYSE terms. So, while the rally was enjoyable, it has already created an overbought condition.
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
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.
By Lawrence G. McMillan
Despite some position seasonality and oversold conditions, the bulls have not been able to gain a foothold, as the stock market has dropped sharply over the past three days.
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.
By Lawrence G. McMillan
This is the time of year when even the media talks about seasonality. Of course, that doesn’t mean they understand what they’re talking about. Why would it be different on this subject than any other?
We have frequently mentioned the positive seasonality that takes place between Thanksgiving and Christmas. It’s unclear exactly why this happens, but it does. In fact, this particular seasonality doesn’t even have a cute name. But it certainly seems to work...
By Lawrence G. McMillan
The broad stock market -- as defined by $SPX -- had a major failure today in that it could not break through the upside resistance at 1265 (the approximate location of the 200-day moving average).
Equity-only put-call ratios are now struggling to remain on buy signals.
Market breadth has continued to be a fairly accurate short-term indicator, and the breadth indicators are technically on buy signals even after very negative breadth today.
$VIX has become rather docile, and seems to be calling for more of a trading range environment.
By Lawrence G. McMillan
While I am a technician, I am the first to admit that not every form of technical analysis yields useful information. In fact, being a mathematician, I really like to know why a particular indicator works – other than “it backtests well.”
