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Weekly Stock Market Commentary 3/16/2018

By Lawrence G. McMillan

An optimist would still see the bullishness in the $SPX chart, with the higher highs (mid-March vs. late February) and the higher lows. A pessimist would see failure to break out over 2790 this week as a major problem. So, one needs to watch resistance at 2790 and support at 2730 as significant levels.

The equity-only put-call ratios have remained solidly on buy signals.

As for the breadth oscillators, they just rolled over to sell signals as of last night's close (Thursday, March 15th). These oscillators have been fairly accurate of late.

Weekly Stock Market Commentary 3/9/18

By Lawrence G. McMillan

The $SPX chart has improved greatly. The 20-day moving average and the "modified Bollinger Bands" have curled upwards. That is a very positive development, for that aspect of the chart is no longer in a downtrend. Now it must overcome resistance at 2790.

A major intermediate-term bullish development is that the equity- only put-call ratios have rolled over to buy signals. This happened in just the last two or three days, so these are fresh signals.

Market breadth has improved over the past week, and both breadth oscillators have risen into modestly overbought territory. That places them on buy signals, canceling out any previous sell signals.

Weekly Stock Market Commentary 3/5/18

By Lawrence G. McMillan

The first thing to note is that the $SPX chart is still negative. The chart in Figure 1 clearly has downtrending moving averages and Bollinger Bands. Those are dominating the action right now.

The equity-only put-call ratio charts remain on sell signals. The ratios are racing higher now -- especially the weighted ratio. It is at levels last seen in November, 2016, just after the election. As such, it is an oversold state.

Market breadth has been accurate in tracking the market's moves. The breadth oscillators are technically on sell signals right now, although they are near the center of their historic range.

XIV: The Scapegoat of The Market’s Decline

By Lawrence G. McMillan

As trading opened on Monday, February 5th, 2018, stocks had already been falling for a few days.  Then on that day there was a major decline – the largest drop in point terms in history.  The Dow was down 1,175 points. The S&P 500 Index ($SPX) was down 113 points.  All other major stock indices suffered similar fates.  Those net changes were effective as of the 4 p.m. (Eastern time) close of the NYSE.  

Weekly Stock Market Commentary 2/23/18

By Lawrence G. McMillan

At least one cannot say the market is boring, as might have been said a month ago. The daily ranges are still large, with both buy and sell programs springing up out of nowhere. The battle between the bulls and the bears seems to have settled in now, and there is a real question whether or not the rally can continue or whether it will have to retest the lows.

First, consider the $SPX chart (Figure 1). It is still in a bearish state. At this point, $SPX has developed a resistance area roughly in the 2750 range. If it can close above there, that would be a bullish development. Conversely, continued failures to close above there make the probabilities of a retest of the lows more likely.

This market is not out of the woods yet

By Lawrence G. McMillan

Prices were all over the map on Friday, as traders tried to lessen their risk heading into a long 3-day weekend.  In the end, $SPX was little changed.  Over the weekend, there have been two night sessions in the S&P futures, without benefit of NYSE trading.  On Sunday night, the futures opened higher and rose about 14 points.  From there, they fell the rest of that session and then fell again last night, dropping 38 points from those highs.  They have recovered a bit now, and stand at about –15 from Friday’s close.  

Weekly Stock Market Commentary 2/16/2018

By Lawrence G. McMillan

First and foremost, the $SPX chart still has a bearish look to it. This oversold rally has been very strong; there's no doubt about that. But oversold rallies often die out at about the declining 20-day moving average, or maybe just a little above that. This rally has just reached that level.

Equity-only put-call ratios have exploded off their multi-year lows and are racing higher at a quick pace. The weighted ratio has reached multi-year highs and is oversold. Despite that, both of these ratios will remain on sell signals until they roll over and begin to trend downward.

Market breadth has been strongly positive this week, and both breadth oscillators finally rolled over to buy signals.

What Just Happened In The Volatility ETPs? (Preview) XIV VXX

By Lawrence G. McMillan

XIV: The Scapegoat of The Market’s Decline

As trading opened on Monday, February 5th, 2018, stocks had already been falling for a few days.  Then on that day there was a major decline – the largest drop in point terms in history.  The Dow was down 1,175 points. The S&P 500 Index ($SPX) was down 113 points.  All other major stock indices suffered similar fates.  Those net changes were effective as of the 4 p.m. (Eastern time) close of the NYSE.  

Weekly Stock Market Commentary 2/9/18

By Lawrence G. McMillan

In just nine trading days, $SPX is down 9.0% and has lost 291 points. That's a lot of distance in a short time. This decline has rolled nearly every intermediate term indicator into a bearish status, if it wasn't there already. It has also caused some massive oversold conditions to appear. But remember, "Oversold does not mean buy," and that is lesson that is harshly taught every time the market sells off like this.

Weekly Stock Market Commentary 2/3/17

By Lawrence G. McMillan

Stocks sold off sharply this week -- the first decline of any note since early last December. This one may have some sticking power, though, as rally attempts failed all week, and then when support was broken on Friday morning, a rout was on.

I am fairly certain that support at 2680-2700 will prove to be useful, but there isn't much support above that. The $SPX chart will remain positive unless the 20-day moving average rolls over and begins to decline. As you can see in Figure 1, it is still rising with a small slope.

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