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In focus: Bullish breakout on tap

By Lawrence G. McMillan

It has been an interesting week. On Monday, we had what I like to call the “emperor has no clothes” selloff. Seriously, to whom is it news that the U.S. financial situation is a mess? Apparently, it was to some, as Standard & Poor’s placing of the U.S. debt on “credit watch” spurred massive selling. However, somewhere on the way to financial collapse, the bears ran out of gas. That day, the S&P 500 Index SPX +1.35%   rallied to close above 1,300, putting in a bottom for the day at 1,295.

Larry McMillan Interviewed for Expiring Monthly's April Issue

Larry McMillan sat down with Expiring Monthly: The Option Traders Journal's Mark Sebastian for their April Issue and discussed option education, technical analysis, and where volatility is headed.  Visit ExpiringMonthly.com to subscribe to the magazine and read the interview.

$VIX April Futures have lowest settlement since June 2007

This morning, the $VIX April futures settled at 14.86,  the lowest futures expiration since June of 2007 which was near the end of the last bull market.  The $VIX index also opened this morning at a recent low of 14.31.  Even though this might be considered overbought, with $VIX trending lower the market remains bullish.

$VRO: $VIX Monthly Settlement

Jon Najarian discusses The 3 Gurus Webinar

From the floor of the CBOE, OptionMonster and TradeMontster founder Jon Najarian discusses why you should attend The Three Gurus Webinar featuring Fari Hamzei, Price Headley, and Larry McMillan on April 26-27th.  See the video below and sign up today.

McMillan leads the Pros in the Fantasy Earnings Trader

Larry McMilan is leading the Pros in the first week of the MarketWatch Fantasy Earnings Trader, ranking No. 32!  That's best score for any of the featured players to date.  Sign up now, and see if you can top Larry.


Market Commentary 4/15/2011

By Lawrence. G. McMillan

$SPX touched support and its rising 20-day moving average at 1310, and probed slightly below that level today before  rallying.

Perhaps more interesting is the fact that the equity-only put-call ratios have remained on buy signals throughout the pullback over the last week.

There was similar action in the volatility indices ($VIX and $VXO).  The calm in these volatility indices is another bullish indication, despite the falling broad market.

Only breadth is giving a negative signal at this time.

In focus: Bears try to take over

By Lawrence G. McMillan

The Standard & Poor’s 500 Index was not able to make new highs over the past week. In fact, selling set in and knocked the market down. However, there is still a general bullish overtone to the indicators, and so the bulls have certainly not capitulated yet. Ostensibly, the catalyst for this selling is the continuing, worsening situation in Japan. However, it is just as likely that the market had reached too much of an overbought condition, and that had to be worked off — which it has been, for the most part.

CBOE Launches Gold Volatility Futures and Options

Trading has begun on the CBOE Futures Exchange (CFE) in Gold Volatility futures. If you’ll recall, a VIX-like calculation can be made on any set of option prices on an individual stock, as long as there are continuous markets being made in the options.

The CBOE has been publishing a “Gold VIX” under the symbol $GVZ for some time. This calculation is based on the options on the Gold ETF (GLD).

Now, futures have begun to trade on $GVZ. Their base symbol is GV, and there are futures in the May, June, July, Aug, and Sept at this point.

Market Commentary 4/8/2011

The market has spent nearly the entire week in a tight range, frustruating both bulls and bears.

Equity-only put-call ratios have continued to remain on buy signals, despite some occasional heavy put buying during the week.

Market breadth has been strong, for the most part.  As a result, breadth remains on a buy signal, too.

Volatility indices ($VIX and $VXO) have drifted down to very low levels.  In general, the decline in volatity is bullish for stocks.

In focus: New highs in sight

Many of the major indexes have already made new post-2008 highs. This includes the Dow Jones Industrial Averag, the Russell 2000 Index, and the Value Line Index. The latter two are actually making all-time highs, having exceeded their 2007 highs.

Most people are not aware of just how strong the small-cap stocks have been. What has not made a new high (yet) is the Standard and Poors 500 Index (SPX 1,335, -0.85, -0.06%) . However, with these other indexes doing so, and with breadth being very strong of late, we expect to see new highs on SPX soon.


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