Blogs

Refining the Successful $VIX Spike Peak Buy Signals

By Lawrence G. McMillan

Once again, a $VIX “spike peak” buy signal is working out very well. This powerful indicator generated a buy signal as of the close of trading on Monday, August 11th. $SPX has been up six of seven days since then, gaining over 50 points.

Weekly Stock Market Commentary 8/15/14

By Lawrence G. McMillan

After an ugly day on Thursday, August 7th, followed by a further decline of 13 $SPX points during the overnight session, stocks have rallied steadily.  Most observers are saying that the correction is over and that the bulls are back in charge.  That may be true, but the evidence is not completely in favor of the bulls, yet.

The Option Strategist Newsletter Volume 23, No. 15 Preview

By Lawrence G. McMillan

Our publication schedule is altered for August, since our office is going to be closed at the end of August for three days.  We are going to publish this newsletter on the first and third Thursdays in August.  Regular publication dates will resume in September.  The weekly Hotline updates will continue to be issued as usual.

Q&A with McMillan: What is Dividend Arbitrage?

By Lawrence G. McMillan

A twitter follower recently inquired about extremely heavy option volume in a particular stock. I explained that it was due to dividend arbitrage. For those wondering, the following Q&A from a 2004 issue of The Option Strategist explains the intricacies of this professional-favored strategy. 

When Should One Buy An Oversold Market?

By Lawrence G. McMillan

We have often used the phrase, “oversold does not mean buy.” It is probably one of the most useful phrases a trader can employ. Many a would-be bear missed almost the entire bear market of 2008 because it got immediately oversold in September 2008 and stayed that way all through one of the worst bear markets ever, that unfolded over the next couple of months.

Weekly Stock Market Commentary 8/8/14

By Lawrence G. McMillan

The $SPX chart remains bearish after having broken down through 1950. $SPX sliced right through the next support level at 1925, and after temporarily holding at 1915, appears ready to test the major support level at 1900.

Equity-only put-call ratios remain on sell signals (see Figures 2 & 3). They are both rising steadily, and as long as they are trending higher, that is negative for stocks.

Q&A with McMillan: Who Buys Worthless Options at Expiration?

By Lawrence G. McMillan

One of our customers recently asked a good option-related question regarding the purchasing of worthless options at expiration.  This is a very common occurance so I figured my response is worth sharing with everyone.  See the question and answer below. 

Customer:

Dear Mr. McMillan,

Stan’s Option Challenge: Question #9 (Free Daily Volume Alerts Month)

We all know that trading options is exciting, highly competitive, and can be very profitable. The key to long term and consistent profits in option trading is options education. The McMillan Mentoring Program, which is run by former Market Maker, white badge AMEX Floor Official, professional trader, and longtime MENSA member Stan Freifeld, can take your trading to the next level.

Stock Market Tops: A Historical Perspective

By Lawrence G. McMillan

I want to spend just a moment pointing out how these market tops can unfold.  One good example was in 2007.  The market had just made new all-time highs in July and everything seemed wonderful.  Volatility had been low (except for one hiccup back in February, 2007), but no one seemed worried.  Then, $SPX broke down sharply with a 30-point down day (yesterday was a 40-point down day for $SPX), and that unleashed the bears.

Weekly Stock Market Commentary 8/1/14

By Lawrence G. McMillan

The genie is now out of the bottle, and it's going to be very hard to put him back in again. $SPX has broken major support at 1950, and that changes things: the chart of $SPX is no longer bullish; it is now bearish.

Equity-only put-call charts continue to remain on sell signals. These put-call ratios will remain bearish until they roll over and begin to trend downwards.  It doesn't appear that will happen anytime soon.

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.
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