Below is the video of Larry McMillan discussing the "recent strong buy signals in the market" on Tuesday's episode of CNBC's Fast Money.
Larry McMillan was recently interviewed by Wall Street Journal's Wall Street Subscriptions website. Read the interview below:
By Lawrence G. McMillan
MORRISTOWN, N.J. (MarketWatch) — The stock market has an extremely impressive set of buy signals going for it. If the bulls can’t capitalize on this, it’s not clear if they ever will.
By Lawrence G. McMillan
At the current time, there are arguably more extreme sentiment readings in the “macro” markets than at any time in recent memory. Macro markets, as defined by economist Robert Shiller in a 1993 paper, are large international markets trading in the form of futures contracts. In a more modern sense, these may also be trading in the form of ETFs. These would include currencies, stock market indices, and most major futures contracts, such as Crude Oil, Gold, and so forth.
By Lawrence G. McMillan
he technical picture continues to improve -- especially in the area of put-call ratios. However, $VIX is still elevated and $SPX is still trapped in a trading range. We need to see improvement in those areas before intermediate-term buy signals can emerge. $SPX is trapped in a trading range, with resistance at 1330-1340 and support at 1305.
Equity-only put-call ratios have now confirmed their buy signals.
By Lawrence G. McMillan
The stock market has virtually alternated strong up and down days of late, without much net change. This has created a trading range, within which we’ve seen a good deal of improvement from several of our technical indicators. Even so, the market must confirm these indicators’ buy signals with an upside breakout. Failure to do so would essentially negate those signals.
By Lawrence G. McMillan
After some relatively heavy, but orderly, selling in the past few weeks, oversold conditions finally reached levels that spawned a sharp oversold rally. But oversold rallies, while often unexpectedly strong, are generally short-lived affairs. There is certainly a good chance that this is the case again this time.
$SPX was able to rally to its declining 20-day moving average. There is further resistance at 1340.
By Lawrence G. McMillan
After some relatively heavy, but orderly, selling in the past few weeks, oversold conditions finally reached levels that spawned today’s sharp oversold rally. But oversold rallies, while often unexpectedly strong, are generally short-lived affairs.
Is that going to be the case again this time, or is the bottom in place? It’s too early to answer that question, but we’ll lay out the criteria as we see them.
By Lawrence G. McMillan
These days, there are more and more volatility indices and futures than ever. One can observe the same sorts of things about them that we do with $VIX futures – in particular, the futures premium and the term structure. We thought it would be an interesting exercise to see how these other markets’ futures constructs compare to that of $VIX. The $VIX construct, for a long time (see chart, page 12) has been that of large futures premiums and a steep upward slope to the term structure.
By Lawrence G. McMillan
The market just cannot get a rally together that is strong enough to erase the oversold conditions. There is now resitance at 1335, where the rally failed this week.
Equity-only put-call ratios continue to plow higher on their charts. They remain on sell signals.
Market breadth has been quite negative, and that is one of the major oversold conditions.
Volatility indices ($VIX and $VXO) have remained stubbornly high. As long as $VIX is above 21, that is bearish for stocks.
