By Lawrence G. McMillan
Thanks to a jittery market and some hijinks from our elected representatives in Washington, DC, the stock market had one of its biggest whipsaws this week. These machinations have created some changes in the technical indicators, but in general, they are back to bullish signals for the most part.
The $SPX chart remains bullish, thanks to the fact that $SPX itself never closed below 1400. Hence, the $SPX chart never broke down.
Equity-only put-call ratios have now rolled back over to buy signals.
By Lawrence G. McMillan
Last year, in discussing the second possible longer-term path for the market, I said “if this scenario were to play out, the market would bottom sometime in early 2012, rally strong into 2013, and then collapse.” I am still sticking with that long-term forecast. We have been talking for years about the similarities between the current market (since the mid-1990's) and the stock market of 1966 to 1983. The primary feature of that past time period was three bear markets.
It’s that time of the year when reviews and forecasts are prevalent. As most of our subscribers know, for our purposes this is an exercise in theory more than practice, for we don’t take positions that last an entire year or longer. In fact, our longest positions are perhaps three months at most – straddle buys, Total put-call ratio buy signals, or other such positions of intermediate-term length.
By Lawrence G. McMillan
The stock market, as measured by the S&P 500 Index ($SPX) has fallen about 40 points since mid-December. Much of this decline has come as the media beats the drum about the fiscal cliff, literally scaring traders into selling. As the decline has taken place, various technical indicators have turned more negative. Our overall take of the $SPX is: continuing closes near or above 1420 are bullish; closes between 1395 and 1420 leave the market in a neutral state, and any close below 1395 turns the $SPX chart bearish.
By Lawrence G. McMillan
MORRISTOWN, N.J. (MarketWatch) — I guess politicians don’t understand that the end of the year is supposed to be a time of holiday celebration and little market movement.
By Lawrence G. McMillan
I guess politicians don't understand that the end of the year is supposed to be a time of holiday celebration and little market movement. Amazingly, this sharp decline today may not actually change the technical picture much -- unless the decline gets worse.
$SPX closed Thursday at 1443.60, with the 20-day moving average at 1420. The 1420 level is also a support level, extending back to October.
Meanwhile, the equity-only put-call charts continue to remain strongly on buy signals.
By Lawrence G. McMillan
The broad market, as measured by the Standard & Poor’s 500 Index has had a pretty good week. First, the 1,420 area was overcome, followed by a pullback to slightly below that level.
By Lawrence G. McMillan
Stocks continue to work higher. The main cause is the unwinding of previous pessimism (see put-call ratio charts, for example), although the media won’t believe that. They are certain it all has to do with the fiscal cliff. Regardless, we are beginning to see overbought conditions again, and a short-lived pullback might be in order. However, with the holiday period approaching, it is unlikely that there will be much activity after tomorrow, for much of the remainder of this year.
As we all know, Apple (AAPL) is down roughly 25% since its high in September. As one may expect, volatility has subsequently increased, resulting in various option trading opportunities. AAPL recently gave a confirmed put-call ratio buy signal. However one may be hesitant to "catch the falling knife" by purchasing the stock, or even going long calls outright.
