© Copyright 2024 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.
Market Breakout – Watch For This Pattern
www.oneoption.com
The technicals look good for a bounce, but don’t expect a run away rally.
PRE-OPEN MARKET COMMENTS WEDNESDAY – Yesterday the market rallied through the 50-day MA, the downward sloping trendline that started in August and above horizontal resistance at the AWWAPQ. This was a key technical resistance level and that bodes well for this bounce because the move came on good volume. Overseas markets were marginally higher and I expect to see follow through today.
This morning ADP showed that 177K jobs were created in the private sector in the month of August and that is inline with expectations. This is a tame number relative to what we have seen recently and it is consistent with the JOLTs job openings number yesterday which served as a catalyst for the market. Initial jobless claims have been steady at 230K for the last month and that bodes well for Friday’s jobs report (185K expected). If hourly wages drop below .4% we will see some buying.
GDP (second reading) came in at 2.1%. That is a slight drop from last month and right now “bad news is good news” for the market. Traders are focused on a Fed pause in September and slower growth is “market friendly”.
Tomorrow China will report the official manufacturing PMI for August along with the Caixin Manufacturing PMI and trade balance numbers. I believe they will be “soft”, but fiscal and monetary stimulus will mitigate any big market decline.
The market fundamentals are NOT bullish from my standpoint. I believe that the Fed needs to “be careful what they wish for”. An economic downturn could gain traction and then they will blamed for a recession. Global growth is decelerating and credit risks loom.
It’s a good thing I don’t trade fundamentals. I am aware of the backdrop because I don’t want to be blindsided, but I trade price. Right now, the technicals are bullish.
The market pulled back this month and the dip had good duration and depth. That tells us that there is selling pressure. It was not a deep fast drop and we found support well above the 100-day MA. That is a sign that buyers are interested. I am not expecting “lift off”. The price action during the bounce will be similar to what we saw on the way down. We will see nice rallies and plenty of retracement. Instead of leaning slightly to the bearish side, I am leaning slightly to the bullish side. September is a weak month so I would keep bullish swings to a week or less.
Bullish markets establish an early low and they close on the high of the day. Look for a bid check early this morning. The gains from yesterday will be challenged and once support is confirmed, buyers will return. A brief shallow drop near the open that is gobbled up would signal that buyers are aggressive. A deeper and more prolonged market drop this morning would signal that sellers are still nearby.
Support is the 50-day MA and resistance is $454.
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.