By Lawrence G. McMillan

The first signs of bearishness are beginning to creep into the superbly strong rally that has taken place since Christmas. $SPX rallied into the 2720-2740 area this week, which is now resistance and has now backed off. Now we have our first sell signal.

By Lawrence G. McMillan

We have written repeatedly about the similarities between the markets of late 2000 and early 2001, ascompared to late 2018 and early 2019. Those comparisons are still valid.

By Lawrence G. McMillan

Stocks backed off a little this week most of it on just one day which was a rare interruption of the oversold rally. The pullback left a minor resistance point at 2675 on the $SPX chart. But there is plenty of room between there and the major resistance at 2800-2820. As long as the next local high is below 2800, the $SPX chart will still be bearish. That is, there will still be a pattern of lower highs and lower lows, occurring beneath a declining 200-day Moving Average which is our definition of a bear market.

By Lawrence G. McMillan

Stocks rallied very strongly this week, and the gains that have been registered since Christmas have been spectacular. This has caused most fundamental investors, and especially the headline- chasers, to become very bullish. Do not be lulled into their euphoria.

By Lawrence G. McMillan

The $SPX chart is still bearish, as it continues to exhibit a series of lower highs and lower lows, occurring beneath a declining 200-day Moving Average. That is a bear market. There is support at 2350, the late December lows, and there is now resistance 2580-2600, which had been support earlier in the year.

By Lawrence G. McMillan

In falling as far as it has, $SPX broke below almost all of the support areas that had been in place. There is now support at 2350 -- last Monday's lows. There was also a bit of support in that area back in the spring of 2017, but that is probably rather meaningless; support that old is not too relevant to a market that has this much momentum and volatility.

By Lawrence G. McMillan

The bears have a tight grasp on this market right now, which is a bit surprising since it is so late in the calendar year. Typically by this time, even in bear markets, there is something of a year- end rally.

New post-October lows were established this week when $SPX traded down to 2583 on Monday. That confirms that this is a bear market, in case you had any doubts.

By Lawrence G. McMillan

The action in the stock market is getting more volatile, at least in realized terms (implied volatility has not kept pace). The bottom line is that resistance at 2800-2820 has been reinforced, and similarly, support at 2580-2620 has been reinforced as well. The $SPX chart is bearish, in our opinion, as long as $SPX remains below 2820.

By Lawrence G. McMillan

There have been a number of positive developments in the past week or so: buy signals, oversold conditions producing rallies, and so forth. But the primary concern is how the $SPX chart looks, and it continues to look bearish. It is still in a downtrend, with heavy resistance at 2820. If that resistance were overcome, then our stance would change to a more positive one.

By Lawrence G. McMillan

The $SPX chart remains bearish. This week's action did not decline far enough to be a test of the October lows. The support area at 2580-2600 remains the bulls' best hope at the moment. If that gives way, then 2530 is the next stop. A violation of that area would be very negative.