By Lawrence G. McMillan
The stock market, as measured by the S&P 500 Index, has had an impressive year so far. A strong month of January wound up with the typical seasonal buy programs which have spilled over into February (as they often do).
But the overbought conditions have continued to grow, without being properly alleviated. Thus, the odds of a short-term correction are high, especially as January disappears in the rear view mirror.
By Lawrence G. McMillan
MORRISTOWN, N.J. (MarketWatch) — The bulls have been completely in charge. While there may be some short-term victories ahead for the bears, it appears the bulls are not finished yet.
By Lawrence G. McMillan
There have only been four down days in January, and as a result the market is very overbought. The intermediate-term indicators are mostly still positive at this time, although there is one glaring exception -- a new sell signal (just registered today) from the standard equity-only put-call ratio.
Other intermediate-term indicators remain positive, though. For example, $SPX is still clearly in an uptrend. However, if the 1260 level were breached, that would be much more bearish.
By Lawrence G. McMillan
An indicator that doesn’t get a lot of attention is how many stocks are above or below their moving averages. In this article, we’re going to take a look at that indicator, using several different moving averages. Clearly, such an indicator is just another way of discerning whether the market is overbought or oversold (or is not). Does this give a better or complementary picture to the indicators that we already use for these purposes, which largely are market breadth and put-call ratios?
By Lawrence G. McMillan
The stock market, as measured by the Standard & Poor’s 500 Index (SPX) has been struggling this week. It hasn’t been going down, but it’s been apparent that it was too overbought to go up much, either. Then today, Fed Chairman Bernanke announced the de facto beginning of QE 3, which propelled financial assets of all sorts (except the U.S. dollar) to rally. SPX moved 20 points off its lows; T-Bond futures soared more than two points, Gold rallied $60, and so forth. You get the idea.
By Lawrence G. McMillan
Friday was another boring market day, with $SPX in a 6-point range. The reality of the situation seems to have struck $VIX traders, though, as that index lost another 8% on Friday. The downward trend of $VIX is bullish for stocks, but this is beginning to look a big overdone. I would have to say that $VIX at 18 (and $VXO below 17) is certainly in overbought territory.
By Lawrence G. McMillan
The stock market continues its slow steady march upward. The $SPX chart is becoming stretched, though, and is somewhat overbought.
The equity-only put-call ratios continue to decline. Thus, they remain on buy signals, but they are not far from reaching the lower regions of their charts, which would make them overbought at least.
Market breadth has been steadily positive, and has reached an overbought state as well -- from which sharp corrections often occur.
By Lawrence G. McMillan
The stock market, as measured by the Standard & Poor’s 500 Index and other major indexes, continues to plow forward at a relatively slow, steady pace.
By Lawrence G. McMillan
The over-riding characteristic of this market since the first of the year is boredom. Daily ranges are tiny, and volatility is practically non- existent. This is ironic, of course, since at the end of last year, so many traders were certain that volatility would increase dramatically once the holidays were over.
The $SPX chart is in an intermediate-term uptrend. The dominant trend line is the rising one that connects the October and November bottoms.
By Lawrence G. McMillan
The stock market, whether measured by the Standard & Poor’s 500 Index or any other major index, has become downright boring.
