By Lawrence G. McMillan
This decline has been one of the swiftest on record, coming from a period of relative calm and even somewhat positive technical indicators. The selling that has taken place in the last two weeks can only be described as panic selling, for the most part.
$SPX declined sharply below its 20-day moving average (see feature article), and as such is quite oversold.
So far, there is support on $SPX at 1100 to 1120 -- the daily lows of this week.
By Lawrence G. McMillan
The market, after some nasty downside fakeouts, finally staged the oversold rally that we – and many others – had been expecting. In slightly less than an hour and a half, $SPX rallied roughly 80 points! Earlier in the day, a rally had been underway also, but it was a nervous one as the market awaited the comments from the Fed after the FOMC meeting.
By Lawrence G. MCMillan
It is almost unfathomable to think that, exactly a mere two weeks ago, $SPX was at 1345 and there were thoughts that an upside breakout was possible. Now, two weeks later, in a move that can only be described as panic, $SPX is at 1200 with no floor in sight. Oversold conditions have ballooned to near-historic levels in some cases, but as the last few trading days have shown, "oversold" does not mean "buy."
Theoretically, there is $SPX chart support in the 1180-1200 area from last November.
By Lawrence G. McMillan
The last two weeks seem like they took two months. It’s hard to believe, but two weeks ago, the Standard & Poor’s 500 was near the high end of its range, with positive technical indicators, and an upside breakout seemed a possibility.
By Lawrence G. McMillan
MORRISTOWN, N.J. (MarketWatch) — Heading into Tuesday, I didn’t think the market could act any worse, but it did. It’s almost impossible to fathom that the market was rising with improving technicals eight trading sessions ago.
By Lawrence G. McMillan
Suddenly, the stock market started to develop "religion" about the U.S. debt situation, and sold off sharply this week.
In one sense, this is like any other "event" -- an FDA hearing or a potentially volatile earnings report: the underlying has trouble moving decisively in either direction until the event has passed.
By Lawrence G. McMillan
Until today, the market didn’t seem to be reacting too badly to the standoff taking place in Washington, regarding the raising of the debt ceiling and the possible downgrading of U.S. government debt.
Are you worried that the wrangling over the debt ceiling might become a crisis for the stock market? A number of analysts are predicting dire results if the ceiling is not passed by the August 2nd deadline. In fact, some say that even now it's too late to keep the U.S. credit rating at AAA. I think the stock market as a whole is smart enough to discount these possibilities, and therefore such worries are probably overblown since the market is rallying, not plunging.
By Lawrence G. McMillan
Thursday's breakout upside move in the stock market has solidified the indicators together into a bullish posture. The chart of $SPX held onto a bullish picture even though the selling in the past two weeks was heavy at times. The 20-day moving average has been rising all along, and the index never closed meaningfully below that average
Equity-only put-call ratios have remained bullish, as they have continued to decline from their high peaks of a month ago.
By Lawrence G. McMillan
The market had a powerful showing Tuesday with the Standard & Poor’s 500 Index rallying 1.6% for the day. Market indicators suggest a potential 100-point rise in the index over the next few months.
