90% Days Abound

By Lawrence G. McMillan

Monday was a monster up day – yet another 90% up day.   That’s two 90% up days in the last three trading days, which means that the market is short-term overbought and due for a correction of at least one day (S&P futures are down about 10 points in Globex trading tonight).  That now makes seven “90% days” – either up or down – in the last 10 trading days.  This type of frequency hasn’t been seen since May, 2010, and even then it wasn’t this frequent (although it lasted for a long time – we’ll have to see how long the current string of “90% days” persists).

The strong up day pushed both breadth oscillators onto buy signals, where they join $VIX, which generated a spike peak buy signal last week.  I think it’s still too early to say that $VIX is now in a downtrend, but that certainly is a possibility...

To read the rest of Larry's Market Commentary, subscribe to McMillan's Daily Volume Alerts.