Just a week ago, $SPX had broken down below support at 5260, and it seemed like the bears might be flexing their muscles. But it was a weak decline, which abruptly turned around on May 31st. $SPX quickly reached new all-time closing and intraday highs above 5340, and has been able to hold the new highs for two consecutive days. Thus, the $SPX chart is bullish, and that calls for a "core" bullish stance.
Back in 2014, we published an article entitled “Sell In May and Go Away...or don’t.” At this time, we’re going to update the data in that article and discuss what it means. It was in the double issue, TOS Volume 23, Nos. 9 & 10, published on May 23, 2014.
Join Larry McMillan as he discusses the current state of the stock market on May 28, 2024.
For quite some time the $SPX chart has been able to rely on support at 5050. The market traded in an area between 5050 and 5180 for nearly a month from mid-February through mid-March. But now that 5050 level has been breached, and selling has intensified. The fact that $SPX was trying to hold that 5050 level for several days means that it has now become resistance. There are other resistance levels at 5150 and 5260, the all-time highs.
We have had a proprietary volatility premium indicator in place for some time. Now, we are going to begin to use it in a trading system that we have developed.
Short volatility strategies attract traders seeking profits during low or decreasing volatility periods, making them appealing in quiet market settings. This appeal has contributed to the renewed popularity of Short Volatility ETNs such as SVXY today.
The $SPX Index registered another new all-time closing high yesterday (March 27th) and another new all-time intraday high on March 21st. So, the bull market is still in place. $SPX has a strong support area at 5050-5180, an area where the Index traded in late February and early March. A close below 5050 would be viewed as quite negative by many traders, and we would expect that sell signals would emerge from our indicators if that happened.