fbpx Blogs | Option Strategist


Weekly Commentary 6/17/2011

By Lawrence G. McMillan

The market has had a rough week as the dominant bearish traits of this market have emerged.  A couple of oversold rallies have been attempted, but they have been unusually weak.  The chart of $SPX is in a downtrend and that is the major trademark of this market.

The equity-only put-call ratios are both on sell signals.  They are continuing to rise rapidly, and thus might be considered oversold, but they will be bearish until they roll over and begin to trend downward. 

In focus: Bears growing stronger

By Lawrence G. McMillan

The current downtrend in the market remains intact, as rallies are getting shorter in time (one-day affairs, mostly) and downward moves are faster and larger. This is further evidence of the fact that the primary trend is down.

Yesterday’s Rally Quickly Forgotten

By Lawrence G. McMillan

Yesterday’s rally has quickly been forgotten, as the market has cascaded downward today in a series of three large drops.  This is further evidence of the fact that the primary trend is down. In fact, considering the hype behind yesterday’s oversold rally, it is actually an even more negative sign that it was obliterated so quickly.  The chart of $SPX is in a downtrend, and that is the most important thing.   $SPX is once again nearly 3 standard deviations below its 20-day moving average (an oversold condition).

VIX June Futures Settle at 19.73


The June VIX Futures settled at 19.73 this morning ($VRO), up $1.71 from the May expiration.  This month's settlement is the 2nd highest this year and is the 2nd consecutive higher settlement off the low April bottom.

For an extenisve analysis of the Volatility and Variance Futures and Options Markets, subscribe to The Option Strategist Newsletter.

Slightly negative bias to expiration

By Lawrence G. McMillan

This is expiration week.  In-the-money put open interest is dominant over in-the-money call open interest, and that is negative.  However, the market would have to move lower by Friday in order for large sell programs to take place.  At current levels, there is only a slightly negative bias to expiration.

Click here to sign up for the Daily Volume Alerts newsletter.  7 Day free trials are available.

CBOE Equity-Only Put-Call Ratio Above 1.00!!

By Lawrence G. McMillan

For the first time since January 7, 2009, the CBOE Equity-Only Put-call ratio is above 1.00.  On Friday (June 10th), nearly 880,000 puts traded, while slightly less than 860,000 calls traded.  This is a rare occurrence -- as evidenced by the fact that there hasn't be a daily reading above 1.00 in 29 months. 

Weekly Commentary 6/10/2011

By Lawrence G. McMillan

The broad stock market has been under more selling pressure in the last two weeks than in the previous nine months.  Intermediate-term indicators are all bearish at the current time, but after five weeks of selling, some oversold conditions have arisen.      

First, the chart of $SPX is in a downtrend, and that is bearish.      

Total Put Call Ratio Revisited

By Lawrence G. McMillan

We normally follow the equity-only put-call ratio as one of our main contrarian indicators.  However, there is another put-call ratio that we follow from time to time, as it gives occasional signals.  That is the total put-call ratio, and it is on the verge of giving a buy signal.  We last wrote about this almost exactly a year ago (Volume 19, number 10&11 [double issue]).  In this article, we’ll review the indicator and update the results over the past year. 

In focus: Downtrend persists

By Lawrence G. McMillan

For the first time in quite a while, the bulls seem to have no power. Rallies are weak and quickly fade to new lows. Oversold conditions that, in the recent past, would have generated strong reflex rallies are having no effect at all. So the overall picture is bearish, but those oversold conditions continue to build along with some other buy signals, and so are worth noting as well.

Daily Commentary 6/8/2011

By Lawrence G. McMillan

Tuesday's market action was extremely negative.  A rally attempt stalled out in the afternoon, and that was bad enough considering the amount of oversold conditions that existed.  But then the entire rally was erased in late-day trading, and S&P futures have continued on down another 6 points in Globex trading tonight.  There is really no way to put lipstick on that pig.  It was just plain ugly.


Option Strategist
Blog Search

Trading or investing whether on margin or otherwise carries a high level of risk, and may not be suitable for all persons. Leverage can work against you as well as for you. Before deciding to trade or invest you should carefully consider your investment objectives, level of experience, and ability to tolerate risk. The possibility exists that you could sustain a loss of some or all of your initial investment or even more than your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and investing, and seek advice from an independent financial advisor if you have any doubts. Past performance is not necessarily indicative of future results.
Visit the Disclosure & Policies page for full website disclosures.