Articles tagged with SPX
I have a large number of signals that I use to determine the most likely short-term and long-term stock market direction. However, one of the strongest long-term signals comes from sentiment and I would not want to bet against it. Long-term sentiment doesn't change directions week-to-week or even month-to-month. It tends to reverse over a very long-term period, but when it does, its signals tends to be excellent....keep reading
I have been studying and researching the impact of monthly options expiration for at least 15-20 years and I cannot recall a monthly expiration that is more dangerous than the one we're about to encounter in the week ahead. June monthly options expire on Friday of this week, and thanks to the recent huge advance in U.S. equity prices, and especially the handful of mega cap NASDAQ 100 stocks, there's record net in-the-money call premium that we'll need to deal with. Based upon our calculation, the QQQ and SPY have net in-the-money call premium totaling more than $7.2 billion. I cannot recall a single month where we've ever seen more. These types of short-term issues have had serious implications with stock market performance as you can see from the chart below:...keep reading
Many technical analysts have been baffled by the stock market's unrelenting advance in 2023, especially on the NASDAQ. The S&P 500, meanwhile, has pushed higher, but has lagged badly on a relative basis. One reason why is that industrials have struggled on both an absolute and relative basis. It's fairly easy to illustrate the importance of transports (a big part of industrials) by using the correlation coefficient indicator at StockCharts.com. I do want to emphasize that big rallies in the S&P 500 are generally accompanied by rallies in transports, though they do NOT necessarily require relative strength in transports:...keep reading
When the Volatility Index ($VIX) moves in lockstep with the S&P 500 for a period of time, you need to be prepared for a sudden price reversal in the S&P 500. This positive correlation doesn't happen often, but here's a very quick report that I sent out to our EarningsBeats.com members last Thursday, literally just before the S&P 500's 5% climb in 5 days:...keep reading
The S&P 500 is a market-cap weighted stock index, which means that the largest companies have the largest influence in the direction of this benchmark index. There are no companies bigger than Apple, Inc. (AAPL), which closed on Thursday with a market cap of $2.1 trillion. So AAPL is obviously the largest holding in the S&P 500. It currently weighs in at nearly 6% of the entire S&P 500. What AAPL does has a big influence on the direction of U.S. equities. Therefore, it's probably a good idea to watch and see if AAPL can hang onto price support established by the June low:...keep reading
If you've been around the stock market for a long period of time, then I'm sure you can agree with this. Nearly a year ago, I made a really good call, expecting significant challenges in 2022, and even suggesting that we could see a low on the S&P 500 in the 3500-3800 range - on a worst case basis. Well, after moving slightly below 3500 in October, interest rates began to drop rapidly, falling from 4.33% on the 10-year treasury yield ($TNX) to 3.41%. That was another solid call. But my calls weren't perfect. With this drop in the TNX, I was expecting a big market rally led by growth stocks. Yet here we are, on December 21st with just ten days remaining in 2022, and I'm still waiting for growth stocks to truly launch - especially the large cap growth names....keep reading
As most of you are probably aware, I do a TON of historical research about the stock market. I've been tracking the S&P 500's daily results since 1950 and the NASDAQ's daily results since 1971. There are both short-term and long-term trends that we should be aware of, especially those of us who like to short-term trade. I will be discussing several of these trends during our just-announced Market Manipulation event that will be held on Saturday, November 5th, beginning at 10am ET. Please be sure to mark your calendar as you will NOT want to miss this event!...keep reading
Usually a market bottom. Reversing candlesticks are candlesticks that portend a reversal in the security or index that you're observing. The idea behind a reversing candlestick is that after a lengthy period of rising or declining prices, market makers begin taking the other side of the trade, flooding the market with either buy or sell orders to reverse the action and profit handsomely from this action and reversal. After the S&P 500 declined for 6 consecutive sessions, a bullish engulfing candle printed on very heavy volume:...keep reading
I don't buy or sell stocks based on historical trends, but history does provide us an important lesson. Ignore it at your own peril. The bearish period from the July 17th close through the September 26th close ends today at the close. While that doesn't mean we should expect soaring prices beginning tomorrow, it is one additional indicator to at least be aware of. Here's a quick glance at how the S&P 500 has performed by month over the past 10 years - ever since the S&P 500 cleared its overhead price resistance from 2000 and 2007:...keep reading
RSI is an indicator that I use periodically at StockCharts.com. I find it most useful in confirming trending or trendless periods. Most technicians use RSI to determine overbought and oversold levels....keep reading
One of the tools at StockCharts.com that isn't discussed often enough is the correlation coefficient. You can access it by looking under "Indicators" and finding "Correlation" on the drop down menu. This indicator allows you to compare how closely any two symbols are correlated - either positively (above 0 with highest level +1) or negatively (below 0 with lowest level -1)....keep reading
From prior options expiration weeks, we KNOW how quickly things can change during "Opposite George" (Seinfeld reference) week. We've seen the stock market move mostly straight up since the June 17th low and, in particular, the past four weeks. The S&P 500 hit a low of 3721.56 on July 14th and we hit a high on Thursday of 4257.91. That's more than 536 points higher in 4 weeks! Below highlights sector performance over the past month:...keep reading
During normal market periods (2022 is not normal, by the way), we tend to see the S&P 500 and 10-year treasury yield ($TNX) trend in the same direction. There's a clear positive correlation between the two. The reason is fairly simple: Strong economic conditions would favor the stock market (S&P 500), but those same conditions would tend to cause selling in bonds as rates rise. The price of bonds and the direction of yields are ALWAYS 100% inverse....keep reading
I'm a HUGE fan of the 20-day exponential moving average (EMA). When we're trending higher, the 20-day EMA tends to provide excellent support and when we're trending lower, that same moving average can provide very difficult headwinds. Let me give you an example of what it looks like on the benchmark S&P 500:...keep reading
In the event you haven't heard, I called the bottom in the S&P 500 last week. I said earlier in the week that I'd select last week's low as my "bottom". That was 3636.87. Will that be the ultimate bottom? Well, I don't know for sure, but I'm seeing money rotate the way it does at bottoms - back towards more growth-oriented and aggressive areas of the market. It's certainly no guarantee, but as I explain often, it's about managing risk....keep reading