The wheels came off the wagon after the Fed meeting on Wednesday. It appears that the Fed's decision to drop rates by 25 basis points, plus their announcement that they might not cut much next year, triggered the selling. But it was probably more of a "sell the news" kind of thing. In the old adage, it's the Fed taking away the punchbowl.
The new trend of $VIX buy signal is the third one in the last year. The $VIX chart from Figure 4 is reproduced here, without the “spike peak” buy signals, so we can discuss these trend of $VIX signals.
First some background: a trend of $VIX buy signal occurs on the first day when both the 20-day Moving Average of $VIX and $VIX itself are below the 200-day Moving Average. Conversely, on the first day that they are both above the 200-day MA, that is a sell signal.
The broad stock market, as measured by indices such as $SPX, continues to probe new all-time highs. This week, there was a positive catalyst in the form of the CPI number, which was benign enough to raise hopes for a further rate cut by the Fed. There is support at 6010, with much stronger support at 5870. As long as $SPX remains above 5870, we will maintain a "core" bullish position. That number may have to be raised eventually, but that's where the strong support is now.
Join Larry McMillan as he discusses the current state of the stock market on December 9, 2024.
The broad market continues to be strong, as most of the major indices are trading at new all-time highs now. This includes $SPX, $NDX, $DJX (the Dow), but not $RUT (the Russell 2000). As $SPX has pushed forward, many of our indicators have moved into overbought territory. However, few have confirmed sell signals.
Join Larry McMillan as he discusses the current state of the stock market on December 2, 2024.
The stock market has made new all-time highs this week, both on an intraday and a closing basis. $SPX has done so, and other major indices that have followed include the Dow Jones 30 Industrials ($DJX) and the Russell 2000 ($RUT). The NASDAQ-100 ($NDX) has not quite gotten there this week, after registering new all-time highs earlier in November.
Join Larry McMillan as he discusses the current state of the stock market on November 25, 2024.
$SPX, stalled out at about 6020, and has seen a modest amount of selling since November 8th. But the damage has been limited, and there is now a more positive development taking place: the gap down and sharp selloff on November 15th left a bearish island reversal in place on the $SPX chart. That gap has now been closed, thereby erasing the negative effects of that chart formation (green circle on the chart in Figure 1).
Stocks have struggled a little this week, after roaring higher post- election. On the $SPX chart, there is resistance in the 6010- 6020 area, where prices peaked on four separate days in the past week. That is minor resistance. The upside target for this move still remains as the +4å "modified Bollinger Band" (Mbb), which is now nearing 6070 and still rising.
