Blogs

Weekly Stock Market Commentary 5/8/15

By Lawrence G. McMillan

The stock market weakened considerably this week, and many of the indicators are now following suit with sell signals. But $SPX price action continues to frustrate both bulls and bears, as it refuses to trend higher or lower.

So now for $SPX, there is support at 2067 - 2072 (the April and May lows), with resistance above at 2125 (the all-time highs). Equity-only put-call ratios have deteriorated badly this week. Both ratios have rolled over to sell signals.

Free Option Webinar : Early Exercise – Strengthen Your Position!

Please join Stan Freifeld, Director of Corporate Services and option mentor at McMillan Analysis Corporation for this complimentary webinar event. Exchange traded options that are traded in the U.S. are classified as either American style or European style. The latter type can only be exercised at expiration while American style options can be exercised at any time. Consequently, writers of these options can be assigned at any time.

Weekly Stock Market Commentary 5/1/15

By Lawrence G. McMillan

Stocks dawdled at or just above the previous all-time highs, but couldn't convincingly push through with a strong move. As a result, things began to deteriorate. Now, 2070 has some significance. If $SPX breaks down below 2070, a more bearish scenario should unfold.

Equity-only put-call ratios are still on buy signals. Both have "wiggles" curling upwards after Thursday's big down day, but they remain on buy signals.

The Big (Volatility) Short

By Lawrence G. McMillan

One of the most successful investment strategies practiced by hedge funds (and other sophisticated investors) in the last ten years has been the “volatility short” trade.  It is rarely mentioned on TV or in the media, but that is not too surprising.  They would rather promote things such as the “Japan carry trade,” which wasn’t necessarily a profitable strategy at all unless a great deal of risk was taken.

Weekly Stock Market Commentary 4/24/15

By Lawrence G. McMillan

Both bulls and bears are frustrated by recent action. Most recently, $SPX has made repeated attempts to challenge the all-time highs, but it has not yet been able to break out.  There is resistance in the 2110- 2120 area that has contained all advances.

In any case, the $SPX chart is still neutral until it breaks out of the triangle in a convincing way.

Option Workbench 4.1 Released

We are pleased to announce the release of Option Workbench 4.1. This release contains some exciting new data that will help you to create more flexible filters. Using the new volume and Put/Call Ratio fields in the Option Profiles will assist you in finding even better trading opportunities.

Other new features include:

Weekly Stock Market Commentary 4/17/15

By Lawrence G. McMillan

There was some positive action this week, but in the end it's still a trading range market. $SPX moved to the high end of the range almost challenging the all-time highs, but it could not break out on the upside. There has been some improvement in the status of the other indicators, but unless $SPX can break out to the upside, it will not really matter.

Equity-only put-call ratios remain on buy signals, as their 21-day moving averages continue to drop nearly every day.

VQT (Dynamic) vs. VQTS (Switch)

By Lawrence G. McMillan

These are two Exchange Traded Notes (ETN’s) that attempt to hedge a long “stock market” portfolio by using a long volatility component.  We have written about VQT before (Volume 21, No. 4), and I often talk about it in my seminars and webinars that discuss volatility trading.  

The Option Strategist Newsletter Volume 24, No. 07 Preview

By Lawrence G. McMillan

The feature article is brief this time, but it is pertinent in that a potential buy signal has just set up in the Total put-call ratio – or has it?  It doesn’t completely fit the parameters that we have laid out for such buy signals, but perhaps “close enough” is sufficient.  The article discusses whether it is or not.

Total Put-Call Ratio System: Did a Buy Signal Just Occur?

By Lawrence G. McMillan

We have very well-defined criteria for determining a major Total put-call ratio buy signal. These are powerful signals, worth a 100-point rise or more in $SPX.  There have been twenty such signals since the year 2000, of which 11 have produced the desired 100-point gain, and three others produced smaller gains.  The total $SPX points gained from the twenty signals is +960.  So, these signals are not to be taken lightly.  

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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