ryanbrennan's blog

By Lawrence G. McMillan

Finally, there has been some follow-through movement to the upside. $SPX has made new all-time closing and intraday highs on the last two days. This keeps the $SPX chart bullish, of course. There is still the strong support at 2480 (the level from which the last major breakout occurred), and now there is also support at 2488 -- last week's lows.

By Lawrence G. McMillan

Intercept Pharm (ICPT) was crushed on Thursday, falling 24 points after the FDA issued a warning on an ICPT liver drug. The stock had previously been in a negative technical pattern, having recently broken down below multiple support at 104. It had tried to rally back, but couldn’t overcome resistance. Stock volume patterns are terrible. There is resistance at 86-90.

By Lawrence G. McMillan

$SPX had made either new intraday all-time highs or closing all- time highs for eight consecutive trading days until yesterday, September 21st, when it did not. The chart remains bullish, with major support at 2480.

Equity-only put-call ratios remain on buy signals. There is a slight wiggle in the standard chart (Figure 2) but the computer analysis laughs that off. Both of these ratios are declining rapidly, as call buying has been dominant since the September 11th breakout by $SPX.

By Lawrence G. McMillan

One system that we normally trade is the one that says the market declines the week after September expiration.  This definition of “expiration” goes back to the days before weekly options, so it refers to the third Friday of the month (today, September 15th).  Last year, this system did not work, but it has produced profits in 22 of the last 27 years.  The track record is shown below.  Note that a negative number is “win” (i.e., the market went down) while a positive number is a “loss.”

By Lawrence G. McMillan

On Monday, September 11th (a date we will never forget), $SPX broke out to new all-time highs. There hasn't been a lot of follow-through after that, but those highs have been retained.

The importance of these new highs is that they distinctly turn the charts positive. The $SPX chart now has support at 2480 (the old highs), as well as at 2460 and every 20 points down, all the way to 2400.

By Lawrence G. McMillan

Late last week, $SPX broke out above a minor downtrend line, accompanied by buy signals from several indicators. It appeared that a move to new all-time highs was imminent.

However, those plans have stalled. $SPX did challenge the previous highs at 2480 but was unable to break through. This week it has struggled. So, at this time, the $SPX chart needs to break out over 2480 to be classified as strongly bullish. Otherwise it's in a trading range, from roughly 2400 to 2480.

By Lawrence G. McMillan

By Lawrence G. McMillan

$SPX has staged a rally that began on Tuesday's opening (August 29th) and has lasted three full days to date. The result was a breakout through the downtrend line that had been in place (see Figure 1), and that has turned the $SPX chart bullish.

On the downside, the first support level is 2440. Tuesday's rally has also left 2428 as a support area, to go along with 2420, and then the major support area at 2400. A close below 2440 be a enough to negate the current upside breakout, in my opinion.