Historical Volatility Historically Low

By Lawrence G. McMillan

Recently the historical (also called actual or statistical) volatility of many of the major indices and their derivatives reached extremely low levels. For example, the 10-day historical volatility of $SPX dropped to 3.7%! In this article, we’ll examine how often this has occurred in the past and what it has meant for the broad stock market going forward from that low volatility reading.

Weekly Stock Market Commentary 9/12/14

By Lawrence G. McMillan

The Standard & Poors 500 Index ($SPX) has made repeated new all- time highs -- both intraday and closing -- over the past three weeks. This action has, of course, resulted in a "bullish" $SPX chart.

The bears have made several attempts to sell the market intraday, but each time it seems to quickly regain strength   especially late in the day.

Equity-only put-call ratios have remained bullish, AS well.

Stan’s Option Challenge: Question #10 ( Free Option Strategist Newsletter: Volume 02 Download)

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.

Weekly Stock Market Commentary 9/5/14

By Lawrence G. McMillan

The bullish news is that $SPX has made a new all-time intraday high for the last three days in a row.  The not-so-bullish news is that $SPX has failed to close at a new all-time on any of those days.  This is the action of a tired market.

The $SPX chart (Figure 1) remains bullish unless $SPX closes below 1985 -- the upper horizontal line.

Equity-only put-call ratios remain on buy signals, however, despite the recent action.

Weekly Stock Market Commentary 8/29/13

By Lawrence G. McMillan

$SPX broke out to new all-time intraday and closing highs this week. New all-time closing highs were made on 4 of 5 consecutive days, which confirmed the move, so the $SPX chart is bullish once again.

Equity-only put-call ratios have finally rolled over to buy signals. To the naked eye, they rolled over more than a week ago, but to the computer, the confirmed buy signals only arrived a couple of days ago.

Weekly Stock Market Commentary 8/22/14

By Lawrence G. McMillan

The rally that began on August 8th has extended quickly and strongly to take $SPX to new intraday and closing all-time highs. When it crossed over resistance at 1960, the $SPX chart improved from "bearish" to "neutral." If another all-time closing high is registered today, that will officially make the $SPX chart "bullish."

Refining the Successful $VIX Spike Peak Buy Signals

By Lawrence G. McMillan

Once again, a $VIX “spike peak” buy signal is working out very well. This powerful indicator generated a buy signal as of the close of trading on Monday, August 11th. $SPX has been up six of seven days since then, gaining over 50 points.

Weekly Stock Market Commentary 8/15/14

By Lawrence G. McMillan

After an ugly day on Thursday, August 7th, followed by a further decline of 13 $SPX points during the overnight session, stocks have rallied steadily.  Most observers are saying that the correction is over and that the bulls are back in charge.  That may be true, but the evidence is not completely in favor of the bulls, yet.

The Option Strategist Newsletter Volume 23, No. 15 Preview

By Lawrence G. McMillan

Our publication schedule is altered for August, since our office is going to be closed at the end of August for three days.  We are going to publish this newsletter on the first and third Thursdays in August.  Regular publication dates will resume in September.  The weekly Hotline updates will continue to be issued as usual.

Q&A with McMillan: What is Dividend Arbitrage?

By Lawrence G. McMillan

A twitter follower recently inquired about extremely heavy option volume in a particular stock. I explained that it was due to dividend arbitrage. For those wondering, the following Q&A from a 2004 issue of The Option Strategist explains the intricacies of this professional-favored strategy. 

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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