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Overbought Conditions Have Been Worked Off (SPX)

By Lawrence G. McMillan

Stocks were volatile Wednesday, after the FOMC announcements.  But, in the end, prices ended up about unchanged.  Overnight, though, that changed substantially as a strong rally has unfolded, with S&P futures up 14 points on Globex.  Not much has changed with respect to the individual indicators.  Both equity-only put-call ratios remain on buy signals. $VIX is still below 15, so that is bullish.

How to Properly Measure Overbought and Oversold Conditions (SPX)

By Lawrence G. McMillan

Some analysts occasionally cite the percent that $SPX is above its 20-day or 200-day simple moving averages [when measuring whether a market is overbought or oversold].

The Option Strategist Newsletter (Volume 22, No. 14) Preview

By Lawrence G. McMillan

For the second time this year, the feature article discusses the overbought state of the stock market.  There are quite a few overbought conditions, and all are enumerated in this article.  However, overbought does not mean “sell,” unless some actual sell signals are received – which, so far, have been lacking.

Weekly Stock Market Commentary 7/26/13

By Lawrence G. McMillan

$SPX remains in a strong uptrend. However, it has reached overbought levels, in that it is "too far" above its 200-day moving average. The first support level is 1670, and if that is violated, traders should turn cautious.

The equity-only put-call ratios remain on buy signals, despite "wiggles" at the end of some charts.

Stock Market is Getting Very Overbought, Again (SPX)

By Lawrence G. McMillan

When one says that “the market” is overbought, he really means that a number of trusted indicators are in extreme states of bullishness.  Recognizing that “the market” is overbought is only moderately useful.  That’s because an overbought market can still rise strongly, while remaining overbought.  Things work similarly, but in reverse, for oversold markets.

Put-Call Parity Free Video Now Available

The recording of Stan Freifeld's A Beautiful Equation aka Put/Call Parity webinar is now available for viewing in the free option tools section of our site.

Option Workbench 2.1 Release Notes - Profile Filtering & Other Enhancements

By Craig Hilsenrath

In the final article on the new features in Option Workbench 2.1, we will be providing some information on Profile Filtering and also discussing some of the Other Enhancements and Bug Fixes.

Weekly Stock Market Commentary 7/19/13

By Lawrence G. McMillan

Now that the Standard & Poors 500 Index ($SPX) has made new intraday and closing highs, joining the other major indices (except NASDAQ), there is once again no overhead resistance.  However, increasingly overbought conditions may combine to slow the rally at least temporarily. $SPX has support just above 1670 (last week's lows), then again at 1650 (the June highs), and then at 1625 or so, where it traded for a time early this month.

How Does One Really Trade Volatility: Free Video Available

The recording of Larry McMillan's How Does One Really Trade Volatility webinar from yesterday is now available for viewing at The Money Show's eTradingExpo. You must first register for the eTradingExpo.

Option Workbench 2.1 Release Notes - Using Fat Tail Distributions

By Craig Hilsenrath

Wtih the recent release of Option Workbench 2.1 we have planned to publish three blog posts detailing the various new features.   In today's article - the second in the series - we will be providing some information on Using Fat Tail Distributions.

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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