There was wild overnight action during the night session on Tuesday January 7th. S&P futures dropped 54 points immediately after news that Iran had fired missiles at U.S. installations in Iraq. Obviously, prices have recovered since then, but perhaps we can get a glimpse into what might happen should a “real” decline of that magnitude take place.
Since we are at the inception of a new year and a new decade (if you adhere to the notion that the decade begins with 2020 and not 2021), it is sometimes useful to see how the patterns of previous years have played out. The top chart on the right is a composite of all years ending in ‘9.” The orange line shows how the “average” of all stock market years has performed. The Blue line depicts the performance only of years ending in ‘9,’ and you can see that it is strong. Typically there is a decline early in the year (January-February) and then it’s off to the races for the remainder of the year – with minor corrections in May-June and September-October. The year that just concluded (2019) didn’t fit that pattern exactly, but it was certainly a very bullish year (Compare the chart in Figure 1 on Page 1).
Option Strategist, Larry McMillan, discusses the current state of our option-oriented indicators. Watch below:
Stocks backed off today, but the bull market is still intact so far. There is support on the $SPX chart at the various horizontal red lines in Figure 1. There isn't MAJOR support, though, until you get down to 3070.
Equity-only put-call ratios are at extremely low levels, due to heavy call buying during most of the recent three-month stock market rally. But they are not on confirmed sell signals yet.
The market closely followed the average "Years ending in '9'" last year. Will it follow the average for "Years ending in '0'" this year? Time will tell.
Watch Larry's latest take on the stock market and what our option-oriented indicators are saying.
The Fear Of Missing Out (FOMO) appears to be the theme in recent days. $SPX and other major indices are roaring ahead, despite a relatively narrow number of stocks carrying the load. But one thing is sure: for now, the $SPX chart is extremely strong.
McMillan Analysis Corp. president Larry McMillan discusses the current state of the stock market. Watch below:
The market could hardly be stronger than it is. $SPX, NASDAQ, and the Dow are making new intraday and closing highs almost daily.
There is now support at 3150, which had been a minor resistance area in late November and early December, before the Index blasted up through there on December 12th -- and hasn't stopped since. Below that, there are support areas at 3130 (minor), 3065-3070 (strong) and 3025-3030.
Stock market guru, Lawrence G. McMillan, discusses the current state of the stock market. Watch below.
