The U.S. stock market, as measured by the S&P 500 index
SPX,
continues in its blissfully strong bullish trend. Once again, the S&P 500, the NASDAQ-100 Index
QQQ
and the Dow Jones Industrial Average
DJIA
are all hitting record highs, though many stocks are lagging behind. The Russell 2000
IWM,
for example, is far below its all-time highs. But if you own the S&P 500 or index-tied options, then the chart is bullish, and a core bullish position is still warranted. Some warning signs are beginning to appear (worsening market breadth, for example), but they have not generated confirmed sell signals yet, for the most part.
The S&P 500 chart has support at 4,850 (last week’s lows) and stronger support at 4,800. There is major support at 4,600, although a pullback to that level would be some cause for concern, merely because it is more than 300 points lower than current levels. There is no traditional resistance, since the S&P 500 is trading at all-time highs. In fact, the index almost touched its +4σ “modified Bollinger Band” again yesterday. A close above that band would stop out the “classic” mBB sell signal (small green “s” on the accompanying SPX chart). We don’t trade those “classic” signals, preferring to wait for a more complete setup of the McMillan Volatility Band sell signal, which has not occurred. If the S&P 500 closes above that +4σ Band, that would reset the whole process and the generation of a new sell signal would have to begin again.
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SPX,
continues in its blissfully strong bullish trend. Once again, the S&P 500, the NASDAQ-100 Index
QQQ
and the Dow Jones Industrial Average
DJIA
are all hitting record highs, though many stocks are lagging behind. The Russell 2000
IWM,
for example, is far below its all-time highs. But if you own the S&P 500 or index-tied options, then the chart is bullish, and a core bullish position is still warranted. Some warning signs are beginning to appear (worsening market breadth, for example), but they have not generated confirmed sell signals yet, for the most part.
The S&P 500 chart has support at 4,850 (last week’s lows) and stronger support at 4,800. There is major support at 4,600, although a pullback to that level would be some cause for concern, merely because it is more than 300 points lower than current levels. There is no traditional resistance, since the S&P 500 is trading at all-time highs. In fact, the index almost touched its +4σ “modified Bollinger Band” again yesterday. A close above that band would stop out the “classic” mBB sell signal (small green “s” on the accompanying SPX chart). We don’t trade those “classic” signals, preferring to wait for a more complete setup of the McMillan Volatility Band sell signal, which has not occurred. If the S&P 500 closes above that +4σ Band, that would reset the whole process and the generation of a new sell signal would have to begin again.
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