By Lawrence G. McMillan
The last two weeks seem like they took two months. It’s hard to believe, but two weeks ago, the Standard & Poor’s 500 was near the high end of its range, with positive technical indicators, and an upside breakout seemed a possibility.
By Lawrence G. McMillan
MORRISTOWN, N.J. (MarketWatch) — Heading into Tuesday, I didn’t think the market could act any worse, but it did. It’s almost impossible to fathom that the market was rising with improving technicals eight trading sessions ago.
By Lawrence G. McMillan
With the current uncertainty in the stock market, the $VIX index has once again received a lot of financial media coverage. Last week we recommended the purchase of $VIX calls as a hedge for your portfolio. We received numerous comments from people who took our advice but didn't seem to understand how $VIX options price.
By Lawrence G. McMillan
Suddenly, the stock market started to develop "religion" about the U.S. debt situation, and sold off sharply this week.
In one sense, this is like any other "event" -- an FDA hearing or a potentially volatile earnings report: the underlying has trouble moving decisively in either direction until the event has passed.
By Lawrence G. McMillan
There has been something of a “buzz” in volatility forums and in some media articles about a backspread strategy that is designed to take the loss out of using $VIX options for protection or speculation. As you know, we are running a “perpetual call buy” strategy for long $VIX calls (Position S610). Also, this week we recommended the purchase of $VIX calls as protection for stock portfolios, for those who were worried about what might happen in the event of a downgrade of U.S. debt or a failure to raise the debt ceiling.
By Lawrence G. McMillan
Until today, the market didn’t seem to be reacting too badly to the standoff taking place in Washington, regarding the raising of the debt ceiling and the possible downgrading of U.S. government debt.
By Lawrence G. McMillan
Thursday's breakout upside move in the stock market has solidified the indicators together into a bullish posture. The chart of $SPX held onto a bullish picture even though the selling in the past two weeks was heavy at times. The 20-day moving average has been rising all along, and the index never closed meaningfully below that average
Equity-only put-call ratios have remained bullish, as they have continued to decline from their high peaks of a month ago.
By Lawrence G. McMillan
The stock market staged a strong rally on Tuesday. Was it just a “Turnaround Tuesday” — a reaction to an oversold condition that had developed via the heavy selling of last week — or was it a true change of sentiment from bearish to bullish? To answer that question, we can look to our technical indicators, for several of them are right on the brink of turning bullish. The bulls actually had a strong chance to effect that change today, and they did not.
By Lawrence G. McMillan
The market had a powerful showing Tuesday with the Standard & Poor’s 500 Index rallying 1.6% for the day. Market indicators suggest a potential 100-point rise in the index over the next few months.
