The broad stock market has been able to consolidate its strong post-Brexit gains. There was a day and a half of selling this week, but a strong upward reversal by $SPX from 2074 on Wednesday leaves the bulls still in control.However, there is frustration for the bulls, too, because $SPX has not been able to assault the all-time highs. A promising Thursday rally failed at the 2110 level, reinforcing the 2110-2120 area as strong resistance.
Stocks had a violent downside reaction to the Brexit vote in Britain. But while the damage was severe, it was short-lived. Over the past four days, a huge rally has emerged that has nearly wiped out the Brexit losses.
$SPX is now back inside the 2040-2120 trading range that had been containing the markets through April, May, and the first half of June. So, the $SPX chart is in a neutral state once again.
Stocks staged an extremely strong rally yesterday, and S&P futures are up another 15 points in overnight trading. This whipsaw action has left traders and investors alike unsure of what comes next. But the rally improved things greatly from a short-term perspective, and may have had some effect on the intermediate-term as well.
The market remained jittery throughout the week in anticipation of the European "Brexit" vote, and the event didn't disappoint. On the heels of the decision for the United Kingdom to leave the European Union, the S&P 500 sold off tremendously Thursday night. Hence, the market is once again teetering on the important support level of $SPX 2040. Although today's price action is indeed a bit scary, from a longer term perspective the bulls remain in control so long as that support level holds.
Over the past few days, volatility has exploded, but the decline in the Standard & Poors 500 Index ($SPX) has been muted. This is unusual, but not completely unprecedented. We’ll take a look at what this might mean for movement in the broad market, as well as why this is happening. As you might expect, there is more than one theory about what’s causing this aberration.
The market was marching along towards new highs (albeit slowly) when some modest selling was accompanying by a big increase in volatility. The combination now has the market on its heels.
$SPX ran into resistance in the "usual" area between 2100 and the all-time highs of 2135. It has broken support at 2090 and 2080, and now support at 2040 looms large.
Equity-only put-call ratios have continued to remain on buy signals, despite the recent pullback in the broad market.
The recording for Larry McMillan's recent "The Current State of The Market-Predicting Option Indicators" webinar with Cyber Trading University is now available. In the video, Mr. McMillan discusses the chart of the S&P 500, the equity only put-call ratios, market breadth and the volatility indices and what they are saying about the stock market. Watch the video below.
The Standard & Poors 500 Index ($SPX) is nearing its all-time highs. But the progress has been rather slow, especially in light of the fact that all of our other indicators are on buy signals. As you can tell from Figure 1, there is heavy resistance all the way up to the all-time highs at 2135 (upper thick red line). The first support level is 2090, and then 2040 below that.
