By Lawrence G. McMillan
Almost like clockwork, the pendulum of this market swings back and forth within the bullish trading range that $SPX occupies. As long as $SPX stays within this range, the overall picture is bullish.
However, this time around, we are starting to see some more deterioration in some other technical indicators. In particular, the equity-only put-call ratios are beginning to seriously weaken. Moreover breadth indicators are on sell signals.
By Lawrence G. McMillan
MORRISTOWN, N.J. (MarketWatch) — Since the broad stock market, as measured by the Standard & Poor’s 500 Index, bottomed in early June, the ensuing rise has been met with doubt, skepticism, and even outright derision (dare we say “hate?”) in some cases.
By Lawrence G. McMillan
This week's selling drove $SPX down to the lower end of its bullish trading channel (see Figure 1). The selling managed to dissipate right near the lower channel, and so the bullish pattern is maintained.
Equity-only put-call ratios have remained bullish throughout this recent decline, just as they have generally remained bullish since generating intermediate-term buy signals right near the June stock market lows.
Market breadth wavered early in the week, but are back on buy signals now.
By Lawrence G. McMillan
The recent sharp, 3-day decline in stocks produced very divergent readings in the breadth oscillators that we follow. Such divergences are rare – occurring about twice per year. When they do occur, though, they are generally a good buy signal for both the short- and intermediate-term.
By Lawrence G. McMillan
Fear was strong in the market yesterday, as selling ballooned by early afternoon. The losses were larger and increasing when a rumor started that the Fed is close to taking more action. That news reversed the market upward, cutting some of the losses about in half. But then, after the close, Apple (APPL) reported a slight earnings miss, and S&P futures plunged another 7 points in after-hours trading.
By Lawrence G. McMillan
MORRISTOWN, N.J. (MarketWatch) — As you may be aware, we’ve been bullish on the broad stock market since shortly after the early June lows.
By Lawrence G. McMillan
$SPX exceeded its early July highs today. That is a new high for this recovery rally that began in early June. As a result, the classic bullish pattern of higher highs and higher lows on $SPX has expanded and been strengthened by adding this new high (see Figure 1).
Equity-only put-call ratios remain strongly on buy signals. They continue to decline, and that is bullish for stocks.
Market breadth has been reasonably strong of late. Breath indicators are on buy signals, and they are modestly overbought.
By Lawrence G. McMillan
The Standard &Poor’s 500 Index traded right up to its recent highs today, continuing the rally that began in early June. However, for the most part, the rally has been accompanied by doubt from many areas of the investing community. As a result, by contrarian thinking, this market should have more room to go on the upside.
By Lawrence G. McMillan
The market sold off sharply on Tuesday when Fed Chairman Bernanke spoke, but then staged a strong reversal rally – closing hear the highs of the day. This continues the strong pattern on the $SPX chart, and we expect a successful challenge of the 1375 resistance area shortly.
Equity-only put-call ratios continue to decline, and that is bullish for stocks. They have not declined so far that they would be considered overbought. Therefore, these intermediate-term indicators are pointing strongly higher.
By Lawrence G. McMillan
In late June and early July, $SPX staged a strong upside breakout, taking the average to new relative highs (and most other major averages followed). This created the very bullish pattern of higher highs and higher lows on the $SPX chart, after the bottom in early June. As the market made these new relative highs, it became extremely overbought. $SPX has backed off about 50 points since July 3rd, alleviating that overbought condition.
Equity-only put-call ratios remain on buy signals.
