ryanbrennan's blog

By Lawrence G. McMillan

This stock market has been able to avoid a meaningful correction for quite some time. But now $SPX has closed below support at 2420, and the failed upside breakout of mid-June is looking like a big negative item on its chart, as well. Of course, several times in the recent past, it seemed as if $SPX were about to succumb and it didn't. Can $SPX pull this escape act off once again? If it can hold support at 2400, it will.

By Lawrence G. McMillan

A real battle has developed around the 2420-2440 area of $SPX. That has been the trading range for the entire month of June, but recently there have been some violent moves within the range, including some failed attempts to break out of it. As a result, this is setting up a more important breakout, once $SPX can find its way to clearly break out of the range.

By Lawrence G. McMillan

This past Monday, $SPX broke out to new all-time highs, smashing through the resistance area at 2440 in a strong manner. Then, just as abruptly, stocks have fallen since then, declining back into the previous 2415 2440 trading range. Both moves would ordinarily portend bigger moves, but in fact both were duds.

By Lawrence G. McMillan

I thought it might be interesting to see how previous $VXO/$VIXMO sell signals have played out.  We have written plenty about this particular signal, which occurs very rarely – only when $VIX is near the 10 area, which is had been for a while now.  The actual signal is this: 

when $VXO closes below 10 and $VIXMO closes below 10.5,
that is a short-term sell signal for the stock market.  

Once the signal is given, $SPX usually declines sharply, almost immediately, but the decline is short-lived.

By Lawrence G. McMillan

It seems that no matter how strongly the market seems to sell off early in the day, it recovers almost all of those losses by the end of the day. As a result, the $SPX chart remains bullish. Subscribers know that we place a great deal of importance on the $SPX chart's trend, and as long as $SPX holds above support, the outlook for the overall market remains intermediate-term bullish.

By Lawrence G. McMillan

A week ago, on Thursday, $SPX had broken out strongly to a new all-time high. It followed up with a modestly positive day the next day. On both days, "stocks only" cumulative breadth made new all-time highs as well, confirming the breakout.

By Lawrence G. McMillan

The market has roared to new all-time highs. This brute force market strength belies sell signals and a certain amount of general negativity in many of the other indicators. But it doesn't really seem to matter, as $SPX remains the strongest and, by definition, the most important indicator.

For the record, there is support at 2400 (this week's lows) and roughly 2350 (the lows of the big down day two weeks ago). An upside target of 2480 is in play, from the width of the previous trading range.

By Lawrence G. McMillan

We have repeatedly stated over the years that the S&P 500 index ($SPX) itself is the most important indicator, because even if all the other indicators are saying one thing, but $SPX is not confirming, then $SPX is right.

At the current time, $SPX is breaking out in a bullish manner, but the other indicators -- for the most part -- are not in agreement. Can $SPX carry the weight all by itself? Yes, because anything is possible, but that's not the ideal situation.