Normally, we have “Naked Put Writes” in this section of the newsletter. But with the explosion in implied volatility and stock price in several “short squeeze” stocks (or “meme stocks,” if you prefer: a meme stock is any publicly traded company that is benefitting from the fact that investors are using social media to drive interest in the company's shares).
The following table shows the current status of the most expensive of these in terms of implied volatility:
Salesforce.com (CRM) just gave a weighted Put-Call Ratio buy signal today. Past signals in this stock have been decent, but this signal looks promising with break out of the recent downtrend. See the charts below:
The stock market has run into considerable resistance at the top of the trading range, as it appears to be consolidating for a violent move either an upside breakout to new all-time highs, or a failure at the top of the range, leading to a swift retracement to the bottom of the range (4060). Since May 24th, $SPX has not closed above 4208 nor below 4192. That is an extremely narrow range, considering the volatility that has been displayed since February 2020.
AMC Entertainment Holdings shares are once again exploding, having been caught in a short squeeze.
The stock’s realized and implied volatilities are soaring. AMC at one point today more than doubled. There are two options strategies, below, to try to capitalize off this uncommon move. (Note that the data in this article are as of the close of trading June 1.)
Join Larry McMillan as he discusses the current state of the stock market on Tuesday, June 1st, 2021.
Stocks continue to push higher, towards the all-time highs at 4238. The pace of the advance has slowed, but there has been some improvement in the internal indicators that paints a more bullish picture in that regard than we've seen in some time. However, if resistance at the old highs holds, then there is a distinct possibility of a retest of the lows of this trading range, at 4060. A move to new highs or a drop below 4060 should propel a stronger move in the same direction as the breakout.
Join Larry McMillan as he discusses the current state of the stock market on Monday, May 24h, 2021.
The S&P 500 Index ($SPX) made a new all-time high on May 7th. Since then, a correction has been underway, and there have been several times in the last week when I'm sure that both the bulls and the bears thought they had taken control. There were two rather violent declines, both terminating near the 4060 level, so that is now the first support level. Both of those declines were followed by furious rallies back to the slightly declining 20-day Moving Average. A breakout from the current range should see follow-through in that same direction.
Our McMillan Volatility Bands Buy/Sell Signals product for TradingView is great at identifying overbought and oversold cryptocurrencies conditions. The latest Ethereum Sell Signal on May 16th was certainly timely. See the chart below.
