Blogs

Lessons From The Market

By Lawrence G. McMillan

One of the great things about trading is also one of the worst things – the market can spring things on you that you never saw coming. Even if you were bearish, you certainly didn’t expect this kind of reaction (or if you did, I submit you’ve been bearish for a long time). In volatility trading, surprises can occur as well – and they have done so this time, as well.

Weekly Stock Market Commentary 8/28/15

By Lawrence G. McMillan

The relative calm of the stock market trading in a range for six months was shattered in recent days. As recently as August 18th, all was calm. But beginning with a sharp 17-point drop in $SPX on the 19th, the rout was on. The support area at 1980-2000 was blown away, but it may offer some resistance on the way back up. There should also be major resistance at the 2040 level. Meanwhile, Monday's lows at 1870 represents support. If that is violated, last October's lows at 1820 are the next support area.

Weekly Stock Market Commentary 8/21/15

By Lawrence G. McMillan

The market took a beating yesterday, as $SPX finally got in line with the indicators, most of which had turned bearish in the last week or so. $SPX closed just below 2040, which technically is a violation of the previous trading range (2040-2135). However, as you can see from the chart in Figure 1, it's still in the general area of the low of the range. If prices should rally from here, we would certainly say that the trading range has held.

Is Apple (AAPL) Oversold?

By Lawrence G. McMillan

This is an article about Apple, but in a more general sense it is an article about whether the “modified Bollinger Band” system can be applied to stock charts.

Weekly Stock Market Commentary 8/14/15

By Lawrence G. McMillan

It seems that no matter what happens -- technically, fundamentally, or volatility-wise -- $SPX remains trapped in its now-six-month-long trading range. Hence the $SPX chart is neutral.

Join Larry McMillan at The All-Stars of Options Trading at the NYSE

Larry McMillan is proud to announce that he will be featured in the TradersExpo's All-stars of Options Trading event in September at The New York Stock Exchange. Larry's will be giving one of his intensive option seminars on "Hedge Option Strategies That Actually Make Money." Other contributers to this 3 day event include Daniel Gramza, Todd Gordon, Russell Rhoads, Bill Ryan, and Sarah Potter. If you register by August 25th, you can take advantage of the Early Bird pricing of $495 (regularly $595). Find more information by visiting the link below:

Weekly Stock Market Commentary 8/7/15

By Lawrence G. McMillan

The stock market continues to hover in its trading range. Despite some promising buy signals from sentiment extremes in put-call ratios and $VIX, there was no follow-through by the Standard & Poors 500 Index ($SPX). We have often said -- and still maintain -- that price is the most important indicator. Regardless, as long as $SPX remains in the broad 2040-2135 trading range, the chart is neutral.

Further Thoughts on “Earnings” Straddles

By Lawrence G. McMillan

We have been operating an event-driven straddle buying strategy in advance of earnings for several months now, with mostly favorable results.  However, this week something happened that we haven’t seen before: the straddles increased greatly in value before the earnings were announced.

Weekly Stock Market Commentary 7/31/15

By Lawrence G. McMillan

The chart of $SPX is the least bullish of the indicators. SPX remains in the 2040-2135 trading range that has bound it for most of this year. Basically this is a neutral chart.

Put-call ratios are much more encouraging. A strong buy signal has been generated by the standard put-call ratio (Figure 2). The weighted equity-only put-call ratio is also bullish (Figure 3).

Market breadth remains mixed, with the NYSE-based indicator now on a buy signal, but the "stocks only" is not.

Top 5 Option Trading Books: Options as a Strategic Investment

Lawrence G. McMillan's market classic, Options as a Strategic Investment, was recently listed as one of the top five option trading books by The Option Prophet's Adam Beaty. He writes:

If you could only pick one book from this list to buy this would be the one you need to get. At over 1000 pages this book will be your option trading bible...

Read the entire review by visiting The Option Prophet.

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