Archive for September, 2009
The Market Is Likely To Take A Breather Next Week - Sell Out Of The Money Puts!
This has been a great week for the market. It has broken out to new highs on heavy volume and strong breadth. “Less bad” economic releases and quadruple witching have fueled the rally. Asset Managers that are under allocated are starting to panic. They have not seen the September pullback that they expected to buy and prices are starting to run away from them. They need to place money so that they can keep up with their benchmarks. The dips that we saw in the last two months were very brief because Asset Managers are getting more aggressive. Solid earnings with …
We Are Likely To See A Rally Through Friday - Scale Out Of Bullish Positions On Strength!
For the last week I have been mentioning that quadruple witching could play an important role this week. Once the upward momentum established itself, option expiration fueled the rally. The market convincingly made a new high for the year and prices closed right on their high of the day Wednesday. Option volume was very heavy and there is a speculative feel to the price action. Many traders have been looking for seasonal weakness in September and they have been left behind. Likewise, Asset Managers who are under allocated have been scrambling to place money. They are getting more and more aggressive …
Train Kept A Rollin! A Breakout To New Highs During Quaruple Witching.
I have been saying for the last few weeks that there is nothing to stand in the way of this market rally. Earnings have passed, interest rates remain low and economic releases are “less bad”. Over 70% of the earnings releases beat expectations last quarter. This recession is more than a year old and Q3 earnings could actually grow year-over-year. Corporations have cut expenses and any incremental revenue growth will go right to the bottom line. This could be a huge morale booster for the market and I expect it to fuel a year-end rally. Interest rates are low and the …
Quadruple Witching and Momentum Are Likely To Push Us Higher This Week!
Yesterday, the market recovered from early weakness and it established a new relative high. Early in the day traders were concerned that a trade war could break out between the US and China. There is likely to be some jousting between the two countries, but protectionism would ultimately hurt both. This morning, Ben Bernanke said he thinks the recession likely has ended. However, the recovery will be modest at best. This news did not come as much of a surprise and the market did not have much of a reaction. Retail sales climbed 2.7%, the biggest gain since January 2006. However, …
Early Weakness And A Quick Rebound Point Higher This Week!
Last week, the market rallied right up to the high of the year on light volume. Traders are still trying to get back into the groove after the holiday and they are searching for any piece of news that might drive activity. This morning, the market started off on a weak note. The US threatened to impose tariffs on Chinese tires and that action did not go unchallenged. China said it would launch an anti-dumping investigation into imports of US vehicles and chickens. The idea of a full-blown trade war with the fastest growing economy of the world splashed cold water …