Archive for the ‘Options’ Category
Market Will Probe For Support. Still Some Downside - Get Ready To Sell Put Credit Spreads
Yesterday, the market tested the downside early and it found support at SPY $135. That was just above the 100-day moving average and buyers stepped in. Throughout the day, stocks clawed their way back and a late rally pushed the SPY back above $136. A reversal like that typically follows through the next day. This morning, the market gaped below support at SPY $136 and that tells me it has more work to do on the downside. The 100-day moving average is getting tested ($134.70) as I write my comments. Overnight, stocks in Europe declined as credit concerns escalated. Interest rates …
Support At SPY $136 Failed. The 100-Day MA Will Be Tested This Week. SPY $134 Should Hold
Last week, the market pulled back on weak economic news in the US. The Unemployment Report, ADP and ISM services were weaker than expected. Elections in France favored socialist Hollande and that result was priced in. Yesterday, the market rebounded from a deep overnight decline. Traders had second thoughts about the outcome in France and poll results in Greece showed that pro-bailout candidates declined in popularity. The Sunday night selloff was a warning sign. The elections in France won’t have an immediate market impact. The new tax-and-spend policy will take months to implement. Austerity plans will be retracted. From my perspective, …
Market Will Test the Downside and Find Support. Choppy Trading Range Ahead
The news last week was not that bad and the market will find support. The economic news in the US was a bit soft. ISM manufacturing was strong and ISM services was weak. ADP pulled back and the jobs report was weaker than expected. However, warm weather inflated the employment picture a few months ago and that distortion is correcting itself. Initial claims dropped and that is a good sign. That improvement won’t show up until the June jobs report. An economic soft patch will be tolerated on a short term basis because QE3 hopes will be revived. India and Australia …
Jobs Report Takes Out Support At SPY $138. Light News and Choppy Trading Ahead
The market continues to chop back and forth. The economic news this week started off strong and finished on a whimper. Early in the week ISM manufacturing and construction spending came in better than expected. The market rallied on the news and short covering pushed the S&P 500 was within striking distance of the March highs. China’s non-manufacturing PMI was a little light and ADP employment missed estimates Wednesday. Yesterday, Europe’s PMI came in lighter than expected and that was offset by a decline in initial jobless claims. As I’ve been saying this week, bad news from Europe should be offset …
Jobs Report Should Be In Line - Muted Reaction. Earnings Will Be Back In Focus Next Week.
The market is consolidating gains from last week and it is within striking distance of new multi-year highs. Asset Managers are not going to aggressively buy stocks ahead of major economic releases and they are in a holding pattern. After tomorrow, they will be ready to reach for their wallets. Tuesday, ISM manufacturing exceeded estimates and construction spending came in better than expected. The “sell in May and go away” crowd got squeezed and that fueled the rally. ADP employment has been a good barometer for the Unemployment Report. However, it contradicted the Unemployment Report last month. It showed that 210,000 …