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ES NQ Futures Trading
- Thread starter Jahajee
- Start date
The sloppy finish on Thursday after setting new multi-month highs reflected a loss of momentum but the S&P held at first level support marked at the top of its recent trading range (982, Friday low 982) and formed an inside day (higher low, lower high) implying minimal pressure despite the overextended posture that this month's impressive gains (+14.6% low to high for S&P) created. The weaker close in the Nasdaq does allow for some further corrective trade but confirmation from the S&P is needed (breach 982, break/close under the low of the high bar from Thursday at 976) to raise the probability of a more than just a very short term pause.
August Almanac
Though the last three years have been superb for August, it continues to rank among the worst months of the year. It also has been especially weak in post-election years. The first nine days of the month are notoriously weak with the first Dow down 9 of the last 12 first days and two nasty bearish days on the 11th and 13th.
Then things often pick up mid-month with bullish days on the 14th, 17th and 18th and a strong expiration day the last six years. The week after expiration has also been strong in recent years and the last three days have turned around the last six years as traderâs get in ahead of early September and pre-Labor Day strength. However, the S&P 500 has only been up twice on the second to last trading day in the last 13 years.
Though the last three years have been superb for August, it continues to rank among the worst months of the year. It also has been especially weak in post-election years. The first nine days of the month are notoriously weak with the first Dow down 9 of the last 12 first days and two nasty bearish days on the 11th and 13th.
Then things often pick up mid-month with bullish days on the 14th, 17th and 18th and a strong expiration day the last six years. The week after expiration has also been strong in recent years and the last three days have turned around the last six years as traderâs get in ahead of early September and pre-Labor Day strength. However, the S&P 500 has only been up twice on the second to last trading day in the last 13 years.
McMillan Market Comment
Thursday, July 30th, 2009
The breakout rally, started when $SPX broke out over 950 -- and thus
out of its trading range -- continues to be strong. The $SPX chart is
positive in that there is a clear uptrend line now, and the moving
averages are rising (see Figure 1). Having said that, there are several
indications that this market is severely overbought. One is that $SPX
has now risen above its 3-standard deviation Bollinger Band
something that rarely happens.
The equity-only put-call ratios remain on buy signals. The
standard ratio had wavered a bit this week, but the computer program
that we use to analyze these charts had resolutely stayed bullish, and
now both ratios are making new relative lows again. These ratios are
not overbought, as they are not that low on their charts. What is
overbought, though, is market breadth.
*********************************************************
Join me, Lawrence G. McMillan, at my own full-day Intensive Option Seminar
on Saturday, November 7th, 2009, in New York. http://www.optionstrategist.com/products/seminars
*********************************************************
Market breadth has been extremely strong, and is overbought at a result.
Normally, strong breadth on a bullish breakout
is a very positive thing, and that appears to be true again this time.
The volatility indices ($VIX and $VXO) moved higher this week.
It is quite unusual to see $VIX rise at the same time that $SPX is
rising. In a broader sense, $VIX is still in a downtrend, and that
is bullish for the broad market.
In summary, the market is bullish but overbought. We would
expect a correction of 50 $SPX points or so to begin soon, to alleviate
this overbought condition, thus paving the way for higher prices.
Thursday, July 30th, 2009
The breakout rally, started when $SPX broke out over 950 -- and thus
out of its trading range -- continues to be strong. The $SPX chart is
positive in that there is a clear uptrend line now, and the moving
averages are rising (see Figure 1). Having said that, there are several
indications that this market is severely overbought. One is that $SPX
has now risen above its 3-standard deviation Bollinger Band
something that rarely happens.
The equity-only put-call ratios remain on buy signals. The
standard ratio had wavered a bit this week, but the computer program
that we use to analyze these charts had resolutely stayed bullish, and
now both ratios are making new relative lows again. These ratios are
not overbought, as they are not that low on their charts. What is
overbought, though, is market breadth.
*********************************************************
Join me, Lawrence G. McMillan, at my own full-day Intensive Option Seminar
on Saturday, November 7th, 2009, in New York. http://www.optionstrategist.com/products/seminars
*********************************************************
Market breadth has been extremely strong, and is overbought at a result.
Normally, strong breadth on a bullish breakout
is a very positive thing, and that appears to be true again this time.
The volatility indices ($VIX and $VXO) moved higher this week.
It is quite unusual to see $VIX rise at the same time that $SPX is
rising. In a broader sense, $VIX is still in a downtrend, and that
is bullish for the broad market.
In summary, the market is bullish but overbought. We would
expect a correction of 50 $SPX points or so to begin soon, to alleviate
this overbought condition, thus paving the way for higher prices.