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Election Day Commentary

The market is in something of a holding pattern as this is election day, 2010.  The expectations are, of course, for a Republican victory to reclaim the House, and now there is even a reasonable chance that they take the Senate, too.  The market views this news as very positive.  Not to throw cold water on the never-ending party, but it should be noted that the first Republican gains against President Roosevelt came in the mid-term elections of 1938 (the Democrats did not lose seats during the first Roosevelt mid-term election in 1934).  For those who have studied our an

Equity Only Put-Call Ratios

A rather large difference has developed between the two major equity-only put-call ratios.  In fact, when we look at many of the other broad-based index put-call ratios, we see similar differences.  So, what is actually taking place?  In this article, we’ll look at the components of these ratios to see if we can discern why this difference exists.  This isn’t the first time we’ve seen such differences.  One of the more notable occasions was near the bottom of the market in July-August 2002, at which time the equity-only ratios both gave premature b

Stock Market Commentary

The following Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.

The major indices have run into resistance. For $SPX, this refers to the 1180-1220 area, which was the April top. If the ensuing correction is merely an overbought correction in an ongoing bull market, it should be limited to support in the 1130-1150 area.

On the other hand, a breakout over 1220 would be very bullish, but it just doesn't seem like the market has the energy for that kind of breakout at this time.

Stock Market Commentary

The following Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.

The $SPX chart is bullish, as it continues to rise and stay above its 20-day moving average, which is now at about 1160. That is also Tuesday's low, so it represents the first level of support.

Stock Market Commentary

The following Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.

The market, as measured by $SPX, broke out to upside on October 5th, and has continually added to its gains since then. That breakout turned the intermediate-term indicators bullish, and they mostly remain in that state.

Stock Market Commentary

The following Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.

On Tuesday of this week, $SPX broke out strongly to the upside. This was a clear sign that the bulls are in control, and -- despite some divergences and overbought conditions -- this market is just plain strong right now. The upside breakout left a very well-confirmed support area in its wake: 1130-1150.

Stock Market Commentary

The following Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.

First, let's review the intermediate-term indicators, for longer- term traders may want to stick primarily with them. The $SPX chart is in an uptrend, and will remain so as long as the index is above its rising 20-day moving average.

The equity-only put-call ratios remain solidly on buy signals.

Market breadth is back on buy signals again and only modestly overbought.

Hail to the Chief - September may be the bottom of the 'Presidential Cycle'

The following article was originally published in The Option Strategist Newsletter double issue 19:10-11 and has since been featured on MarketWatch.com.

The "Presidential Cycle" is a seasonal tendency that has a strong track record. Simply stated, the Presidential Cycle includes a major market bottom in the mid-year between presidential elections -- which is this year.

The Option Strategist wins financial newsletter award

Hooray! We are very proud to announce that Lawrence G. McMillan’s The Option Strategist Newsletter has received the National Association of Active Investment Managers (NAAIM) President’s Award for Excellence in Financial Newsletter Writing.

As a recipient of the award, our newsletter has been listed on NAAIM’s website (http://naaim.org/newsletterawards.aspx) where visitors can download a sample copy.

Who's buying all those S&P 500 put options?

The following article has been featured on MarketWatch.com.

Traders are paying huge premiums for Standard & Poor's 500 Index options expiring in September, October and November.

It is not unusual to see traders worry about what might happen to the market in the typically nasty September-October time frame, but this year, they're really getting carried away.

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