Lawrence G. McMillan
@optstrategist
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The Option Strategist - trader, money manager, author & publisher of option trading newsletters. Stocks / futures / crypto. Disclosures:
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Joined July 2009
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Download my free eBook containing various guidelines that will generally keep you out of trouble, increase your efficiency of capital, and hopefully improve your chances of making money with options.
#OptionsTrading
#options
#optionstrade
#Optionselling
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The "55 Day Rule" is now in play. The 1929 and 1987 crashes came exactly 55 calendar days after the peak of the market. 55 days from the current peak (Jan 4th) is Monday, Feb 28. $DJX $SPX $SPY
#stockmarketcrash
#stockmarketnews
#OptionsTrading
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Equity-only put-call ratios plunged again yesterday, and now both are at their lowest levels of this rally...These are the lowest levels since Jan '04, and once again represent an extremely overbought condition. $SPX $SPY
#optionstrategist
#OptionsTrading
#putcallratio
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The election is 30 days out. Beginning tomorrow, all option strips necessary to calculate $VIX will be POST-ELECTION options. that will raise VIX no matter what is happening -- and it's why VIX is up today even with the market ripping higher.
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Equity-only put-call ratios continue to decline. The drop in the standard ratio yesterday was significant, and that ratio is now trading at its lowest levels since July 2014. It has moved beyond the extremely optimistic levels of January 2018 and January 2020! $SPY $SPX
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Equity-only put-call ratios plunged yesterday, breaking down below their June lows. That is important and it confirms that this important intermediate-term indicator is on a solid buy signal now.
#OptionsTrading
#putcallratio
#stockmarketnews
#StockMarket
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Just because $VIX is low doesn’t mean that the stock market is immediately going to collapse. It may be a precursor to some broad market selling further down the road, but a low $VIX is not a problem until $VIX begins to rise out of its “low” state...
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In a bit of a surprising development, the equity-only put-call ratios are both generating buy signals, according to the computer programs that we use to analyze them. $SPX $SPY
#stockmarkets
#trading
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Noteworthy developments from Friday:
1) the standard equity-only put-call ratio hasn’t been this low in over 16 years
2) Both breadth oscillators are at all-time highs
3) The most equity calls ever traded in one day took place Friday on the CBOE
4) There were no new lows on Fri
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Just in case you were wondering why $VIX is up so much today, it's because the 30-day "window" now encompasses $SPX options expiring after the election. This is the first day that's been true. So now, the "election bump" applies to $VIX
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Last night I was watching my DVR'd last episode of the summer-long Jeopardy Masters Tournament. The category was "Common Bonds," and the answer was this image. Bollinger Bands made it to Jeopardy!
@bbands
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There are 2 simple conclusions to draw from that data: 1) the market is extremely overbought, 2) overbought markets can continue upward for longer than one might think. The correlation is that the market is due for a sharp correction (perhaps just one day or two)
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Instead of responding to the 100 people reminding me that two data points in 100 years is not a trading strategy -- I'll appreciate Brian for knowing that is not my point. Rather, just an interesting observation.
Fascinating data, not a trade strategy, but worth a read!
here is a snippet
thanks for sharing, Larry
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Some major negative divergences are setting up once again, very similar to last Jab. The weighted equity-only ratio is now lower than Jan. Cumulative breadth is falling away from all-time highs while $SPX is still making new all-time highs. Breadth was shockingly terrible on Fri.
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In what I would consider something of a shocking development, New 52-week lows outnumbered new 52-week highs yesterday! This was true for all 3 data sets: “Stocks only,” NYSE, and NASDAQ. This comes on the heels of 2 days in which new highs were at the highest levels in years
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Could we really be at the beginning of a wild volatility ride all the way up to the election? It’s a bit hard to imagine, considering that $VIX is already near 30, but if the pattern holds true, it doesn’t look like $VIX is going to calm down anytime soon
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An $SPX MVB Sell Signal has been registered today. Learn more about this
@tradingview
indicator at
#OptionsTrading
#StockMarket
#StockMarketNews
$SPY
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The 21-Day Weighted Equity-Only Put/Call ratio has reached the lowest level in 7 years.
#extremelevel
#options
#overbought
$spx $spy
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The $SPX chart remains bullish as long as $SPX is above 4400. Some overbought conditions are building, but there are no sell signals yet. $SPY $VIX
#OptionsTrading
#stockmarkets
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Equity-only put-call ratios rose yesterday, and our computer analysis programs are saying that the weighted ratio is now on a sell signal. This is meaningful, for that ratio has descended to a very low point on its chart (i.e., it is very overbought)... $SPX
#stockmarkets
$SPY
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"Equity-only put-call ratios have rolled over to buy signals – with both being confirmed by our computer analysis programs. These ratios have not exactly plunged from these levels, but they have apparently topped out..." $SPX $SPY
#OptionsTrading
#StockMarket
#stockmarketnews
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We received a lot of interest in the weighted Equity-Only Put-Call Ratio chart we posted recently, so I wanted to share this article on how we calculate and interpret the charts: "Interpreting Put-Call Ratio Charts"
#OptionsTrading
#putcallratio
#Options
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$SPX faced early challenges yesterday but closed higher, continuing the oversold rally. The 20-day MA is nearing 5410, where the chart gap would be filled. This morning, $SPX reached 5400, suggesting the rally might be ending. A close above 5410 would have to be respected
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After trading in a range for nearly three weeks, $SPX has broken down. A further breakdown below 5370 would be very negative, but so far this is just healthy correction. $SPY $VIX
#OptionsTrading
#StockMarket
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Much appreciated!
@SpacGuru
🙏
I think I have single handedly sold more books for
@optstrategist
/ Lawrence G. McMillan than anyone else on
#fintwit
.
Please reply if you bought this book at my recommendation please.
We have never met or spoke 🙌
#Options
#OptionsTrading
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Breadth has been the biggest problem of late, and the breadth oscillators have not accompanied $SPX on its move back to new all-time highs. The breadth oscillators have officially generated sell signals now.
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Volatility derivatives are crucial to watch right now. Despite rallies in $SPX, $VIX futures and indices haven't regained their upward slope...yet. $VIX futures still trade at significant discounts, which is generally a strong bearish signal for stocks.
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The bulls staged a huge rally around the FOMC meeting, holding so far. If $SPX closes above 5585, it could negate the bearish pattern and set up for new highs. But if this rally fails, watch 5370 support. Breaking it could mean a quick decline. Key levels: 5585 and 5370.
#Stocks
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Overbought conditions have produced a modicum of selling, but confirmed sell signals are still lacking from many of our indicators. $SPX $SPY $VIX
#OptionFlow
#optionstrading
#stockmarketinvestingtips
#stockmarketnews
#stocks
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Bear markets are tricky, and if what we are seeing now is the continuation of the bear market, it is exhibiting some of the actions that are designed to fool most of the people most of the time. $SPX $SPY $VIX
#optionstrade
#StockMarket
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Yesterday, $SPX broke down below the entire support area (5440-5490) and a pattern of lower highs and lower lows has already emerged, which is quite bearish. Therefore, we are no longer recommending a “core” bullish position, and we are acting on new sell signals. (1/2)
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From strictly an $SPX chart point of view, things are still bearish. Most oversold rallies die out after reaching the declining 20-day moving average, and this one just reached that target this morning...
#StockMarketNews
#StocksInNews
#OptionsTrading
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After a manipulative month-end “rally,” $SPX has broken another support level. The pattern of lower highs and lower lows is bearish. $SPY $VIX
#StockMarket
#OptionsTrading
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Weekly Stock Market Commentary 6/3/2022 $SPX $SPY $VIX
#options
#optionstrading
#StockMarket
#stockmarketnews
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Put-call ratios are close, but not yet on sell signals.
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The 2nd part of my "What Is Wrong With $VIX?" article was published on Friday. Check it out at:
#OptionsTrading
#volatility
#StockMarket
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$SPX keeps hitting new all-time highs, with strong breadth and low volatility reinforcing its bullish trend. Sticking to our 'core' bullish stance, but ready to act on any confirmed signals. $SPY $VIX
#optiontrading
#StockMarket
#optionstrading
#options
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Yesterday, an MVB Sell signal was registered in $SPX. The last signal in August '22 was spot on. The previous one in late November '21, although early, led to the beginning of the bear market. Learn more about our MVB signals at:
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$SPX is going this alone, and that eventually is not a good thing. But the upside momentum is strong right now, and it doesn’t pay to fight it. There is a strategy that can work in both cases: benefiting from upside momentum, but still having downside profit potential: straddles.
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$VIX continues to hover near 19, which is near the lows for this bear market that began in stocks in Jan 2022. This is something of an “overbought” condition for the stock market, since in the past 16 months, stocks have generally fallen after $VIX reached this low level.
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$SPX continues to fall, as the bear market trendline remains in place. Conditions are getting very oversold,
so short-term buy signals are possible. $SPY
#OptionsTrading
#StockMarket
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This is a classic example of “the market can remain irrational for longer than you can remain solvent” (J. M. .Keynes). It has been overbought for a long time, but if you tried to short it just because it was overbought, you would have been buried.
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Small cap stocks joined the party late, boosting $SPX and other indices to new highs. But now, they've sparked severe overbought conditions and a correction is underway. Sell signals are emerging, though the bull market might not be over. $VIX
#stockmarket
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As is typical of bear market price action, a seemingly bullish set-up has quickly morphed into a bearish one. The technical measures we follow have all turned bearish - with some of these reaching oversold levels (breadth). $SPX $SPY $VIX
#stocks
#OptionsTrading
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Despite overbought conditions, $SPX continues to move higher, albeit at a slower rate. No sell signals have been confirmed yet, so the bulls are still in charge. $SPY $VIX
#stockmarkets
#Optionselling
#optiontrading
#StocksToTrade
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Equity-only put-call ratios plunged again, with both of them making new relative lows. The standard ratio is now down to 50 (almost unimaginable) and the weighted ratio is approaching the low levels of last December...
$SPX $SPY
#putcallratio
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$SPX has broken down below support, and a bearish pattern of lower highs and lower lows is now in place. $SPY $VIX
#optiontrading
#StockMarket
#stockmarketnews
#stocks
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Those post-election options are going to stay very expensive.
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The market has staged a strong rebound rally, and if it can progress just a little further, the pattern of lower highs and lower lows will be broken, which would be very bullish. $SPX $SPY $VIX
#StockMarketNews
#StockMarketUpdate
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$SPX has finally broken out to the upside. Since so many people were watching the 4200 level, this breakout has added significance. A move above 4300 would be very bullish. $SPY $VIX
#OptionsTrading
#StockMarket
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Both technically and fundamentally, this market is resembling the the bear market of 1973 - 1974. $DJI $SPX $SPY $DIA $QQQ $IWM
#stockmarketnews
#StockMarket
#OptionsTrading
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$SPX broke down to a new relative low yesterday. In my opinion, this solidifies the argument that the late Jan rally was a false upside breakout. False upside breakouts often lead to a swift decline once the majority of traders realize that the bull market is not back in place
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Yesterday’s internals were terrible. Although the major averages didn’t necessarily reflect that. Breadth was so bad that it was almost a 90% down day (in “stocks only” terms), and new lows outnumbered new highs (with new lows above 100 issues) for the first time in almost a year
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The breakout over $SPX 4200 extended to a breakout over 4300 as well. Conditions are overbought, but sell signals have not matured yet. $SPX $VIX
#OptionsTrading
#stockmarkets
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Equity-only put-call ratios remain solidly on sell signals. They have begun to rise even more rapidly now, and it looks like they won’t be falling back to a new 2023 low anytime soon. This means that they will remain on sell signals as long as they are rising.
#OptionsTrading
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It should be noted that intraday volatility has been very extreme in the past couple of weeks. Over the past 12 trading days, the Average True Range of $SPX has been 80 points per day, or 2%. That is unusual in a market that is moving sideways, or even up...
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The equity-only put-call ratios have rolled over to sell signals. This is confirmed by the computer analysis programs as well as the naked eye. $SPX $SPY
#putcallratio
#optionstrategist
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Volatility has exploded, and the pattern of lower highs and lower lows is still in place. Oversold rallies look powerful, but eventually fade. $SPX $SPY $VIX
#StockMarket
#StockMarketNews
#optiontrading
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$SPX is on the verge of new all-time highs, but can’t seem to get there. A failure at this level could see a retest as low as 5370. $SPY $VIX
#OptionsTrading
#StockMarket
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I met Mike Gallagher shortly after I joined TMAK in 1976. Mike ran the Thomson operation on the floor of the CBOE at the time...
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Justin Mamis was a famous stock market technician (he died in 2019). I particularly recall that he and James Dines were the only newsletter writers that seemed to be consistently bearish on the 1973-74 bear market, while it was in progress.
#stockmarkets
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The continuing similarities between this bear market and the one of 1973-74 are amazing; that’s the same sort of statement that Fed Chairman Arthur Burns would make back in 1973, and the market would inevitably respond by selling off.
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New all-time highs for $SPX are well within reach, but not all internal indicators are on board with that. Straddle buys might make sense here. $SPY
#OptionsTrading
#StockMarketNews
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A friendly reminder to wait for confirmed buy signals.
#StockMarket
#stockmarketnews
#OptionsTrading
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The weighted equity-only put-call ratio curled upward yesterday from extremely low levels and generated a sell signal. However, remember that these ratios gave sell signals right at the beginning of 2024, and those did not work well (unless you were trading $IWM). $SPX $SPY
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The ratios are so low that the computer analysis programs rate them as “sell,” figuring that any sort of return to the mean will make them rise.
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$SPX hit a new all-time high last week, confirming a breakout. McMillan’s volatility bands suggest a target of 5800. Mixed signals: put/call ratios show sell, but breadth is bullish. $VIX signals are split. Watch for seasonal weakness this week
#Stocks
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The breakdown below 4200 has created additional selling in $SPX, which remains in a downtrend. However, an important seasonal bullish short-term trade starts today. $SPY $VIX
#optionstrade
#stockmarkets
#StockMarketNews
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The realized volatility of $SPX (HV20) jumped up to 11% yesterday, which is a sell signal. When it first moves to 8 or less, which it did last week and then rises above 10, that is a sell signal for the broad market.
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Equity-only put-call ratios are at new lows for this move, which means they are still on buy signals but are extremely overbought. The standard ratio is at lows last seen in January 2004. The same is true for the Total ratio and even more so for the CBOE’s Equity-only ratio $SPX
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Volatility persists with $SPX showing resistance at ~5300 & 5400. Put/call ratios signal remain on sells. $VIX peaked at 69 generating a short-term buy.
#NYSE
breadth improved, but bearish indicators abound.
#StockMarketNews
#OptionsTrading
#options
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$SPX shows a bearish trend with lower highs/lows. If S&P falls below 5370, bearish momentum will increase. Small caps outperform large caps, keeping breadth positive. Mixed signals with realized volatility rising. $SPY $VIX
#StockMarket
#OptionsTrading
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Quarantine silver lining: I guess a lot of people have found time tackle a 1,000 page book
#optionstrategist
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New Highs numbered more than 100 on the NYSE for two consecutive days on Friday, and so this indicator returns to a buy signal. This buy signal will remain in place until New Lows outnumber New Highs for two consecutive days on the NYSE. $SPX
#NYSE
#StockMarket
0
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Realized vol of $SPX now down to 9%; technically it's not overbought until it gets to 8%, but this is clearly a warning sign (and what's even more worrisome here is that this is also what happened in April 1930). New highs are barely holding above new lows.
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$SPX has decisively broken out over 4400, thus returning to a bullish mode. Some overbought conditions are already in place, nearing sell signals, though. $SPY $VIX
#options
#stockmarkets
#StocksToBuy
0
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Equity-only put-call ratios have risen this week, and now both are back on sell signals, albeit in very oversold territory (meaning they are very high on their charts). Both of these sell signals are confirmed by the computer analysis programs. $SPX $SPY
#optionstrade
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This means the $SPX is going to open below the crucial support level of 3280. If it closes below that level today, the $SPX chart can no longer be interpreted as bullish. That would be a significant bearish development, in my opinion.
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The standard put-call ratio has fallen so far that is now below the levels of last December and February. That is, it is very overbought. But it won’t generate a sell signal until it rolls over and begins to rise.
#optionstrategist
$SPX
#putcallratio
$SPY
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One of the buy signals that has been generated by this strong oversold rally is a full-blown McMillan Volatility Band (MVB) buy signal: $SPX $SPY
#StockMarketNews
#StocksInFocus
#technicalanalysis
#OptionsTrading
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The equity-only put-call ratios have generated sell signals. The last three days have seen relatively heavy put buying, and that has finally spurred these ratios to turn sharply higher. $SPX
#OptionsTrading
#optionstrategist
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Stocks have blasted to a new 2023 high, and a challenge of the all-time highs seems possible. We do not have any confirmed sell signals at this time. $SPX $SPY $VIX
#optionbuying
#StockMarketNews
#StocksInNews
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"The bears have unleashed a very nasty bout of selling, crashing through support levels with ease. Oversold conditions are already present, but there are no confirmed buy signals yet. We will act on all signals, as they occur, but the trend is down until further notice." $SPX
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Here's the $VIX Composite Chart from 1989-2022. Of course, not every year complies with this chart exactly, but many have this general shape, and so that is why we occasionally return to this chart – to remind ourselves, and you, of what to expect.
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Our recent buy signals remain in place, but we are watching them carefully, because several (put-call ratios and breadth, especially) could revert to sell signals if the internals have another day as bad as yesterday. $SPX $SPY
#OptionsTrading
#stockmarkets
0
3
14
The advance has stalled out near the 2023 yearly highs at the $SPX 4600 level, but at this time there are still no confirmed sell signals among our indicators. $SPY $VIX
#StockMarketNews
#stockmarkets
#optionstrade
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Our CBOE Equity-only Put-Call Ratio has been below 45 for 60 days so far. Other extremely low readings in the past led to difficult markets.
@CBOE
#optiontrading
#StockMarket
0
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On the short-term, $VIX is now back in “spiking mode” because it has risen more than 3.00 points over a 3-day period. The “spike peak” buy signal will occur when $VIX closes more than 3.00 points below the highest price that it reached while in spiking mode.
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"...The bullish case is still intact as long as $SPX remains above 3900 -- despite some potentially negative indicators."
$SPY $VIX
#StockMarket
#stockmarketnews
#OptionsTrading
0
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Despite a pullback, $SPX remains bullish above 5440-5490 support. Key indicators are strong, but some sell signals have appeared. VIX spike may indicate a short-term buy signal. Core bullish position held.
#StockMarket
#SP500
#StockMarket
#OptionsTrading
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The market is certainly overbought, but overbought does not mean “sell.” Overbought momentum can carry the market a long way before it rolls over. We will be alert for confirmed sell signals and will act on them if they arise. $SPX $SPY
#optiontrading
#stockmarkets
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We continue to maintain a "core" bearish position and will do so as long as the trends of $SPX (downward) and $VIX (upward) are in place. Additionally, we will trade confirmed signals around that "core" bearish position
#options
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R.I.P. James Dines. You were a true believer in new trends and were not swayed by “Wall Street.”
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As the noted Smith Barney technician, the late Alan Shaw, said “The most bullish thing a market can do is get overbought and stay there.” That’s what this market is doing. $SPX $SPY $VIX
#optiontrading
#stockmarkets
#StockMarketNews
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The $SPX chart is still bullish, for its 20 and 200-day moving averages are still rising, and it did not break the support at 3280, which I consider a sort of “last resort.” If support at 3280 is decisively broken, then the $SPX chart would no longer be graded “bullish” imo.
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Both bulls and bears are trying to convince everyone that the market is headed their way. The bulls are claiming that "everyone is bearish," but we know from looking at the weighted equity-only put-call ratio that that is not true.
$SPX $SPY
#StockMarket
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Thanks for sharing
@michaelsantoli
@MrBlonde_macro
@SJD10304
For what it's worth,
@optstrategist
- from whom I first learned of the 10/27-11/2 bullish seasonal trade many years ago - has refined it to show that in years when October hasn't seen a S&P 500 pullback of 3.2% or more, the bullish bias hasn't really shown up.
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