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Velocity, not volatility

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.

Weekly Commentary 11/4/2011

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.

In focus: Bulls being tested

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.

One can hardly rely on technical levels at this time

By Lawrence G. McMillan

Yesterday had all the earmarks of panic selling, but it has shaken the confidence that had been gathered throughout the strong October rally.  Once again, it seems that the majority of the major players are still acting in a like manner daily, so that these wilder-than-usual swings take place. $SPX sliced all the way down through the supposed support at 1220-1230, and traded as low as 1215.

Weekly Commentary 10/28/2011

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.

Another October Bottom

By Lawrence G. McMillan

Once again, it appears the October has become the “bear killer.” Yes, volatility is still high and put volume is still heavy, so there are clearly worries out there. But it’s normal for there to be plenty of worries at the beginning of a new bullish phase. In this article, we’re going to look at some other similar October bottoms in the past to see how the market unfolded at those times.

In focus: Bulls take charge

By Lawrence G. McMillan

The market, as measured by the Standard & Poors 500 Index, finally broke out of the tight 1190-1220 range this week — to the upside. Since then there have been two attempts to pull back, but they have met support near 1220, and so that is now a confirmed support area.

Weekly Commentary 10/21/2011

By Lawrence G. McMillan

The stock market remains volatile within an ever-narrowing range. For ten days now, $SPX has traded within a range of 1190 to 1230. Clearly a breakout of that range should be significant.

Equity-only put-call ratios are a bit mixed. The weighted ratio rolled over to a buy signal about two weeks ago, but the standard ratio has continued to climb -- thereby remaining on a sell signal.

Breadth indicators continue to remain on buy signals, and they have reached varying degrees of overbought.

The stock market is at a crucial juncture

By Lawrence G. McMillan

MORRISTOWN, N.J. (MarketWatch) — The stock market, as measured by the Standard & Poor’s 500 Index, reached a very important point: the top of the trading range, near 1,220-1,230. The trip to get to this point has been an interesting one.

In focus: Awaiting resolution

By Lawrence G. McMillan

A week ago, we stated that the market was at a crucial juncture — that it had rallied to the 1,220-1,230 area on the Standard & Poor’s 500 Index and that it was either going to break out to the upside or retrace to the bottom of the trading range. What has happened is that the market has remained volatile around that area, but that so far there has not been a resolution of the bullish and bearish forces.


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