Below is the video of Larry McMillan discussing the "recent strong buy signals in the market" on Tuesday's episode of CNBC's Fast Money.
By Lawrence G. McMillan
MORRISTOWN, N.J. (MarketWatch) — The stock market has an extremely impressive set of buy signals going for it. If the bulls can’t capitalize on this, it’s not clear if they ever will.
By Lawrence G. McMillan
he technical picture continues to improve -- especially in the area of put-call ratios. However, $VIX is still elevated and $SPX is still trapped in a trading range. We need to see improvement in those areas before intermediate-term buy signals can emerge. $SPX is trapped in a trading range, with resistance at 1330-1340 and support at 1305.
Equity-only put-call ratios have now confirmed their buy signals.
By Lawrence G. McMillan
The stock market has virtually alternated strong up and down days of late, without much net change. This has created a trading range, within which we’ve seen a good deal of improvement from several of our technical indicators. Even so, the market must confirm these indicators’ buy signals with an upside breakout. Failure to do so would essentially negate those signals.
By Lawrence G. McMillan
After some relatively heavy, but orderly, selling in the past few weeks, oversold conditions finally reached levels that spawned a sharp oversold rally. But oversold rallies, while often unexpectedly strong, are generally short-lived affairs. There is certainly a good chance that this is the case again this time.
$SPX was able to rally to its declining 20-day moving average. There is further resistance at 1340.
By Lawrence G. McMillan
The market just cannot get a rally together that is strong enough to erase the oversold conditions. There is now resitance at 1335, where the rally failed this week.
Equity-only put-call ratios continue to plow higher on their charts. They remain on sell signals.
Market breadth has been quite negative, and that is one of the major oversold conditions.
Volatility indices ($VIX and $VXO) have remained stubbornly high. As long as $VIX is above 21, that is bearish for stocks.
By Lawrence G. McMillan
Despite a rather severe oversold condition, there have been no actual confirmed buy signals issued yet. This oversold condition has persisted for the past couple of weeks, spurring modest rallies, but all that seems to have done is to ease the oversold condition a bit and make way for the next wave of selling, such as we saw today.
By Lawrence G. McMillan
As often happens on the first day of trading after a three-day weekend, the market is buffeted by cross-current, so there are several moves. Initially, the market was strong yesterday, topping out almost exactly at $SPX 1335. Then selling drove the index down about 16 points, before a late rally took it back to near the highs. Even though intraday volatility increased, actual (realized) volatility has not. Tonight, S&P futures were down about 14 points after more negative news out of Europe.
By Lawrence G. McMillan
The massive oversold condition that existed at the end of last week has spurred a rally this week. when the market is as oversold as it got last week, it usually rallies back slightly beyond its 20-day moving average. That moving average is currently at 1350.
The equity-only put-call ratios remain on sell signals.
Breadth has been slightly positive this week, but the breadth indicators continue to remain on sell signals and are still in oversold territory.
By Lawrence G. McMillan
The $SPX chart has turned bearish, with the breaking of the 1340 support level. However, it is oversold in that it is more than 4 standard deviations below its 20-day moving average, which is currently at about 1370.
Equity-only put-call ratios remain on sell signals, but they are so high on their charts that they are in an oversold state, too.
The breadth indicators have now reached extremely oversold levels, but they are also on sell signals.
