The S&P 500 index
SPX,
continues to make new closing and intraday highs nearly every day — it has made a new intraday and/or closing all-time high on nine of the last 10 trading days.
In addition, a new index has joined in – the Russell 2000
RUT,
IWM,
.
It is supposed to be more representative of the “average” stock, and it has been trading sideways nearly all year after last making a new all-time high in mid-March 2021. Thus, its new upside breakout is significant.
There should be support at the most recent highs prior to these most recent breakouts. For the S&P, that would be in the 4525-4550 area.
There is no resistance per se, given that the index is trading at new all-time highs. Sometimes we can use the upper (+4σ) “modified Bollinger Band” (mBB) as a target of sorts, but not now since SPX crossed above that level on Oct. 26 and has remained well above it ever since. This move above the +4σ Band successfully completed the previous McMillan Volatility Band (MVB) buy signal from mid-September (red “B” on the accompanying SPX chart).
The next “classic” mBB sell signal will be generated when SPX closes below the +3σ Band, which is currently at about 4585 and rising rapidly again. Today, that sell signal would occur if SPX were to close below 4605 – unlikely.
The equity-only put-call ratios remain strongly on buy signals. Their current buy signals were generated in mid-October, when the ratios rolled over and began to decline. That decline in these ratios is now accelerating.
As long as the ratios are trending lower, the buy signal for stocks will remain in place. There has been a massive amount of call buying in individual stocks this past week, which is the major force in propelling these ratios lower.
Both the CBOE Equity-Only put-call ratio and our “All Exchange” equity-only put-call ratio have had daily readings in the 35-39 range for the past two days. That is, when the ratio is 35, only 35 puts are trading for every 100 calls. These ratios will only turn bearish if they roll over and begin to rise.
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Read More: Opinion: Russell 2000’s breakout is significant for stock-market
Opinion: Russell 2000’s breakout is significant for stock-market
The S&P 500 index
SPX,
continues to make new closing and intraday highs nearly every day — it has made a new intraday and/or closing all-time high on nine of the last 10 trading days.
In addition, a new index has joined in – the Russell 2000
RUT,
IWM,
.
It is supposed to be more representative of the “average” stock, and it has been trading sideways nearly all year after last making a new all-time high in mid-March 2021. Thus, its new upside breakout is significant.
There should be support at the most recent highs prior to these most recent breakouts. For the S&P, that would be in the 4525-4550 area.
There is no resistance per se, given that the index is trading at new all-time highs. Sometimes we can use the upper (+4σ) “modified Bollinger Band” (mBB) as a target of sorts, but not now since SPX crossed above that level on Oct. 26 and has remained well above it ever since. This move above the +4σ Band successfully completed the previous McMillan Volatility Band (MVB) buy signal from mid-September (red “B” on the accompanying SPX chart).
Lawrence McMillan
The next “classic” mBB sell signal will be generated when SPX closes below the +3σ Band, which is currently at about 4585 and rising rapidly again. Today, that sell signal would occur if SPX were to close below 4605 – unlikely.
The equity-only put-call ratios remain strongly on buy signals. Their current buy signals were generated in mid-October, when the ratios rolled over and began to decline. That decline in these ratios is now accelerating.
As long as the ratios are trending lower, the buy signal for stocks will remain in place. There has been a massive amount of call buying in individual stocks this past week, which is the major force in propelling these ratios lower.
Both the CBOE Equity-Only put-call ratio and our “All Exchange” equity-only put-call ratio have had daily readings in the 35-39 range for the past two days. That is, when the ratio is 35, only 35 puts are trading for every 100 calls. These ratios will only turn bearish if they roll over and begin to rise.
Lawrence McMillan
…
Read More: Opinion: Russell 2000’s breakout is significant for stock-market