Early this year, we noted that some longer-term indicators had given bullish signals. One was when $SPX advanced by more than 1% for three consecutive days. That occurred in early March. Another bullish sign was when $SPX remained above its 20-day moving average for at least 30 days. That occurred during March as well. In both of those cases, the short-term gains were “meh,” but the longer-term ramifications (one year out, say) were quite positive.
Stocks continue to plow ahead to new all-time highs on the Standard & Poors 500 Index ($SPX). This has created some overbought conditions, but as of this time, there are no sell signals in place.
$SPX has support at the old breakout level of 2120-2135, so any correction should hold at that level. On the upside, we have targets of 2198 and 2226.
All indicators were in synch this week, as $SPX finally broke out to new all-time highs. The breakout started with a "90% up day" last Friday, which put the Index on the brink of new all- time highs, and it carried through with $SPX higher each day so far this week. We have targets extending as high as 2205 at this time.
Equity-only put-call ratios finally got with the bullish program, and both have not only rolled over to buy signals, but both have made new relative lows for this year.
The recording of Larry McMillan and Ken Calhoun's recent "Option Indicators & Breakouts" webinar is now available. In the video, Mr. McMillan discusses the current state of option-oriented indicators and delves into the trading systems behind the recent successful buy signals. Check out the video below or click here.
The broad stock market has been able to consolidate its strong post-Brexit gains. There was a day and a half of selling this week, but a strong upward reversal by $SPX from 2074 on Wednesday leaves the bulls still in control.However, there is frustration for the bulls, too, because $SPX has not been able to assault the all-time highs. A promising Thursday rally failed at the 2110 level, reinforcing the 2110-2120 area as strong resistance.
Stocks had a violent downside reaction to the Brexit vote in Britain. But while the damage was severe, it was short-lived. Over the past four days, a huge rally has emerged that has nearly wiped out the Brexit losses.
$SPX is now back inside the 2040-2120 trading range that had been containing the markets through April, May, and the first half of June. So, the $SPX chart is in a neutral state once again.
Stocks staged an extremely strong rally yesterday, and S&P futures are up another 15 points in overnight trading. This whipsaw action has left traders and investors alike unsure of what comes next. But the rally improved things greatly from a short-term perspective, and may have had some effect on the intermediate-term as well.
The market remained jittery throughout the week in anticipation of the European "Brexit" vote, and the event didn't disappoint. On the heels of the decision for the United Kingdom to leave the European Union, the S&P 500 sold off tremendously Thursday night. Hence, the market is once again teetering on the important support level of $SPX 2040. Although today's price action is indeed a bit scary, from a longer term perspective the bulls remain in control so long as that support level holds.
