Thursday, March 20th, 2008
Stock Market
The stock market has been particularly volatile -- and non-directional
-- since we last published. $SPX daily changes have been -27, -12
(although intraday it was -32), +54, -32, and +31. In case you need
help with addition, that's a net change of ........+14, which is not very
much. However, for day traders and others using short-term signals,
it has been a good week
The rallies were identifiable from deeply oversold conditions --
especially Tuesday's +54 point $SPX rally (the Dow was up over 400) --
(and we have traded those successfullly in our daily services).
The chart of $SPX remains negative. Thursday's rally
brought $SPX back to the 1330 level for the nth time. It has been
consistently been turned away by resistance at that level. Not only
that, but the 20-day moving average has declined to roughly 1330 as
well, and the downtrend line encompassing the entire bear market is
nearing that level, too. Consequently, a close above 1340 would be
quite bullish. Otherwise, the bear market remains in force.
The equity-only put-call ratios remain on sell signals. They have
moved to new highs. We won't have buy signals from this indicator
until the ratios roll over and begin to trend downward.
Market breadth has been very poor throughout the decline over
the past few weeks. Even the 400-point rallies that popped up on the
last two Tuesdays were not enough to turn breadth positive. Even
Thursday's second big rally this week didn't do the trick.
Finally, $VIX is the one indicator that DID generate a true
intermediate-term buy signal, when it spiked up over 35 on Monday,
and then plunged below 26 within a day and a half. That constitutes
a buy signal -- the only one of the lot as far as our intermediate-term
signals go.
In summary, we are still waiting confirmation of intermediate-
term buy signals before turning outright bullish on this market.
McMillan Analysis Corporation
PO Box 1323
Morristown, NJ
Info@OptionStrategist.com
www.OptionStrategist.com
(800)724-1817