© Copyright 2025 eOption, a division of Regal Securities, Inc., Member
FINRA/
SIPC |
Important Disclosures
950 Milwaukee Ave., Ste. 102 | Glenview, IL 60025
The information on this web site is for discussion and information purposes only. All accounts accepted at the discretion of eOption which accepts customer orders only on an unsolicited basis, and does not make any recommendations regarding any security or securities product with the possible exception of orders executed by our full service bond desk. Nothing contained herein should be considered as an offer to buy or sell any security or securities product. Online trading has inherent risks due to loss of online services or delays from system performance, risk parameters, market conditions, and erroneous or unavailable market data.
FINRA BrokerCheck reports for Regal Securities and its investment professionals are available at www.finra.org/brokercheck.
Options Disclosure: Options involve risk and are not suitable for all investors. Prior to trading options, you must be approved for options trading and read the Characteristics and Risks of Standardized Options. A copy may also be requested via email at support@eoption.com or via mail to eOption, 950 Milwaukee Ave., Ste. 102, Glenview, IL 60025. Online trading has inherent risks due to loss of online services or delays from system performance, risk parameters, market conditions, and erroneous or unavailable market data.
eOption Commissions: Broker-assisted orders are an additional $15. Option strategies involve multiple purchases; therefore your transaction costs may be significant for option strategy trades. A commission rate of $2.00 for equities and $3.99 + $.10/contract for options, per execution, applies to orders entered and filled by eOption's Auto Trade Desk and does not apply to customers who enter their trades directly into the eOption platform and are not utilizing the Auto Trade desk.
Broker Comparison: The competitor rates from published websites were verified on 05/25/2023 and are believed to be accurate, but not guaranteed. Commissions are subject to change without notice. At some firms, commissions may not reflect broker-assisted fees, orders over 1,000 shares, penny stock trades, OTCBB, pink sheet stocks or foreign stock orders. Firms may offer reduced commissions if additional criteria are met.
Blog & Commentary: eOption is neither affiliated with, sponsored by, nor endorses commentary and the opinions expressed are solely their own. Content is provided for educational and informational purposes only and eOption cannot attest to its accuracy or completeness. No information provided has been endorsed by eOption.com and does not constitute a recommendation by eOption to buy or sell a particular investment. You are solely responsible for your own investment decisions, and eOption makes no investment recommendations and does not provide financial, tax or legal advice.
This Bounce Will Provide Valuable Clues
www.oneoption.com
Here’s what I will be watching for this week.
PRE-OPEN MARKET COMMENTS MONDAY – I need to preface my market comments with… it’s August. There is a negative seasonal bias and the news/volume dry up. We have seen selling pressure this month and technical support levels have failed. I am neutral to slightly bearish, but the market does not go straight up or down. I am expecting a bounce and it will tell me how aggressive buyers and sellers are.
A meager bounce that only lasts a few days and that features mixed overlapping candles on light volume will tell me that the selling pressure is still fairly heavy. I want to see SPY $445 preserved (AVWAPQ) and ideally we stay below $444. If I see this price action, I will be ready to reload shorts and I will look for opportunities to sell OTM bearish call spreads.
A nice robust bounce on good volume that marches right through $445 with stacked consecutive green candles and heavy volume will tell me that buyers are eager at this level (especially if the bounce lasts well into next week). That scenario would suggest that the 50-day MA is going to hold and I would be looking to sell out of the money bullish put spreads. I would be more cautious with this strategy (sell fewer spreads) because I sense a fairly stiff market headwind.
The S&P 500 is trading at a forward P/E of 18 for 2024. That is fairly rich on a historical basis and there is downside room for the market. Bond yields are rising and the Fed is steadfast. On Friday we will hear from Jerome Powell (Jackson Hole Conference) and his comments are likely to splash cold water on the market. We know they are hawkish from the FOMC minutes last week. China’s economic growth has been soft and credit concerns are increasing. The PBOC just lowered rates another 10 basis points and they told banks to make more loans. I remember Congress lowered lending standards in 2005 for home loans. Making bad loans to stimulate economic growth increases the odds of a credit crisis.
I suggest day trading more this week and watching this bounce very closely for the price action I referenced above. NVDA reports after the close on Wednesday and in a light trading environment it is likely to have an impact on the market.
This morning we are going to get a nice little bounce. Asia was generally weak and Europe was up. There is not a tailwind this morning and this feels like an oversold bounce. Day trade based on the intraday price action and trade either side. Expect a dull day and keep an eye on the volume. If it is above average, we have a chance for movement.
Support is at the 100-day MA and resistance is the 50-day MA.
Content is provided by OneOption, LLC, which has no affiliation with Regal Securities, Inc. (“Regal”) This commentary is provided for information purposes only, and is not a recommendation, offer or solicitation by Regal to buy or sell securities or to adopt any investment strategy. Regal has not participated in the creation of the OneOption content and does not directly or indirectly endorse the content. Any reliance on this material is at the sole discretion of the reader.