The stock market has put on a good show of strength this week, after breaking out on the upside from the trading range that had held prices in check throughout the last half of December. $SPX is now challenging the downtrend line of this bear market as well as its declining 200-day Moving Average, both of which are near 4000. A clear breakout above 4100 would be very bullish.
An item that has been affected by higher interest rates is the premium on S&P (and other) Index futures. The premium on a stock index futures contract is related to dividends (higher dividend payouts decrease the premium on the futures) and interest rates (higher interest rates increase the premium on the futures). We received this question recently, and I realized once again that newer traders may not have seen this before:
It turns out that the increase in interest rates has gone on long enough and raised rates enough that some things regarding derivatives are occurring that haven’t been in place in quite some time – or ever, for that matter. We are going to address a couple of related topics. Newer option traders might not have seen some of these things before, since essentially interest rates have been at or near zero since 2009, until last year.
Join Larry McMillan as he discusses the current state of the stock market on January 9, 2023.
We are well into the new year of trading, and the seasonally bullish period surrounding year-end has passed. The Santa Claus Rally produced a small gain for $SPX of 30 points less than its historical average of a 1.1% gain, but a gain nevertheless. If it had been a loss, that would have been another negative for the stock market.
Happy New Year! Join Larry McMillan as he discusses the current state of the stock market onJanuary 3, 2023.
This is supposed to be a positive time of the year for the stock market -- the so-called "Santa Claus Rally" period. Typically, the market advances about 1% during the last five trading days of one year and the first two of the next. But If this seasonal period ends with a loss, that is generally negative for the broad stock market. As the creator of this system, Yale Hirsch, said: "If Santa Claus should fail to call, bears may come to Broad and Wall." Classic!
Join Larry McMillan as he discusses the current state of the stock market on December 27, 2022.
Stocks continue to struggle after $SPX broke down through the 3900 support level a week ago. The end of the trading year typically brings with it a short-term rally, classified as the "Santa Claus Rally" by the late Yale Hirsch.
Join Larry McMillan as he discusses the current state of the stock market on December 19, 2022.
