Is Breadth Giving A Warning Signal?

By Lawrence G. McMillan

We follow four main indicators, and they usually guide us in the correct direction of the markets. As noted elsewhere in this issue, price is the most important indicator of all (in this case, the price of the Standard & Poors 500 Index [$SPX]). However, the others – equity-only put-call ratios, market breadth, and volatility indices – are important, too. Usually, we want confirmation from price before acting on opposing signals from the other areas.

Weekly Stock Market Commentary 7/25/14

By Lawrence G. McMillan

$SPX has now traded at a new all-time intraday high for the last three days, and it closed at a new all-time high the last two. Those new highs have been confirmed by some of the other indicators, but some are still on sell signals. $SPX has support at 1950, and that has proven to be very strong.

Equity-only put-call ratios remain on sell signals. They have been steadily rising for nearly two weeks.

Larry McMillan Discusses the Current Market in his Benzinga Interview

Larry McMillan was recently interviewed on the Benzinga PreMarket Prep show where he discussed why insurance using options is important, the recent $VIX spike peak buy signal, the state of our indicators, common option trading mistakes and much more. Watch the interview below.

Q&A with McMillan: The Diagonal Collar

By Lawrence G. McMillan

The following customer question was featured in the most recent edition of The Option Strategist Newsletter

Weekly Stock Market Commentary 7/18/14

By Lawrence G. McMillan

Well, the market finally found something it couldn't shake off -- at least not right away -- on the geopolitical front. Normally, this wouldn't be a big deal, but an overbought, somewhat nervous market can react to this type of news dramatically, and it did. So what is the real overall effect?

The Option Strategist Newsletter Volume 23, No. 13 Preview

By Lawrence G. McMillan

This week’s feature article is a bit longer than usual, but with volatility at such low levels, and so many traders and media talking about it, I wanted to describe how volatility hedged positions should be viewed.

Weekly Stock Market Commentary 7/11/13

By Lawrence G. McMillan

For the first time in a while, some sell signals are beginning to creep into our indicators, and the broad stock market is selling off. So far, the damage has been controlled, but Thursday's sharply down opening shows that there is the potential for some heavy selling if there is perceived danger. $SPX has support at 1950 and 1925, and even at 1900 below that.

Equity-only put-call ratios are in agreement, and they are both on sell signals.

Hedging With Volatility Options $VIX $VXO

By Lawrence G. McMillan

We have written many articles in the past about how to hedge a portfolio with $VIX options, but in this article we are going to expand the discussion somewhat.  Not only are there more products than mere $VIX options, but the concepts of hedging with volatility options extends beyond mere portfolio protection into quasi-arbitrage strategies and then into more creative speculative (but still hedged) strategies. 

Short-Term Correction, or More?

By Lawrence G. McMillan

The market finally suffered some selling yesterday.  This didn’t cause any more of our indicators to turn negative, but breadth indicators are getting close.  Even so, we have enough sell signals in place to call for at least a short-term correction.  One of the more bullish things, though, is that the parade of “analysts” on CNBC is uniformly bearish.  This includes a number who are perma-bulls for the most part; but now they are calling for a correction.

Stan’s Option Challenge: Question #8

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.

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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