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Our indicators remain bullish and so do we

By Lawrence G. McMillan

The market sold off sharply on Tuesday when Fed Chairman Bernanke spoke, but then staged a strong reversal rally – closing hear the highs of the day.  This continues the strong pattern on the $SPX chart, and we expect a successful challenge of the 1375 resistance area shortly.

Equity-only put-call ratios continue to decline, and that is bullish for stocks.  They have not declined so far that they would be considered overbought.  Therefore, these intermediate-term indicators are pointing strongly higher.

Weekly Commentary 7/13/2012

By Lawrence G. McMillan

In late June and early July, $SPX staged a strong upside breakout, taking the average to new relative highs (and most other major averages followed).  This created the very bullish pattern of higher highs and higher lows on the $SPX chart, after the bottom in early June.  As the market made these new relative highs, it became extremely overbought. $SPX has backed off about 50 points since July 3rd, alleviating that overbought condition. 

Equity-only put-call ratios remain on buy signals.

Making Put Selling Decisions

By Lawrence G. McMillan

This article will describe some of the methodology that we use to select recommendations for this newsletter.  Several subscribers have asked questions regarding how we go about this, so we’ll attempt to answer them by describing the processes that we use to recommend naked puts. In future issues, well address volatility skew positions, and even put-call ratio based trades. 

In focus: Gathering strength

By Lawrence G. McMillan

The stock market has now pulled back for five straight days. This came after a strong upside breakout.

On the surface, it is disappointing that the upside breakout momentum faded and gave way to this decline. However, the market was very overbought a week ago, and it was inevitable that a decline was to take place to alleviate that overbought condition. It is our viewpoint that this pullback is a healthy one, and it will lead to higher prices soon — certainly over the intermediate term.

Buy signals remain in place

By Lawrence G. McMillan

MORRISTOWN, N.J. (MarketWatch) — Three week ago, we wrote that strong buy signals were in place . For the most part, those buy signals remain in place today. Therefore we continue to look for higher prices ahead.

Lawsuit over TVIX: Another display of the “nothing is ever my fault” philosophy

By Lawrence G. McMillan

In yet another display of the  “nothing is ever my fault” philosophy, a class action lawsuit has been filed against VelocityShares and Credit Suisse on behalf of anyone who purchased the Daily 2x Long VIX Short-term ETNs (TVIX) from November 30, 2010, through March 22, 2012.  

TVIX shares were first issued on November 30, 2010, so the lawsuit covers nearly the entire length of time that they have existed – from day 1 through the day that Credit Suisse began issuing new shares again (this past March). 

Weekly Commentary 7/6/2012

By Lawrence G. McMillan

$SPX broke out on June 29th, and has since added togains, exceeding the early June highs. This creates the bullish pattern of higher highs and higher lows on its chart. $SPX could easily challenge resistance at 1390-1400 in the immediate future.

Equity-only put-call ratios remain on buy signals.

Market breadth was very strong again, and now the breadth indicators are on buy signals but are quite overbought.

In focus: Bullish breakout

By Lawrence G. McMillan

In a somewhat classic move, “everyone” was bearish and yet the market broke out to the upside. The most recent upside move kicked off in earnest last Friday, after yet another apparent agreement in Europe.

What's Influencing Volatility Pricing?

By Lawrence G. McMillan

With so many volatility derivatives and products available for trading now, a debate has arisen as to what is influencing their pricing.  Is it actual volatility expectations, or is it supply and demand – or possibly something else altogether?  It is important to understand these relationships for several reasons, the most obvious of whish is that it can help one to construct theoretically profitable trades.

Weekly Commentary 6/29/2012

By Lawrence G. McMillan

$SPX is back down into its previous trading range. The broadest measures of the $SPX trading range now show support at 1270 (the early June lows) and resistance at 1360 (the mid- June highs).  There is also support at 1305-1310, where $SPX has registered daily lows several times this month.  The 1335-1340 area is now resistance once again.

Equity-only put-call ratios remain on buy signals.

At the current time, breadth indicators are on buy signals as well.

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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