© 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.
Here Is How I Will Trade the FOMC Reaction Today
www.1option.com
The market is going to challenge the all-time high this morning and we are seeing follow through buying after the FOMC statement. The statement was hawkish and I believe the move was largely driven by quadruple witching programs. Once the momentum was established, there was nothing to stand in the way.
Key changes in the FOMC statement from previous months:
1.The Fed will be reducing asset purchases (tapering) at twice the rate that was reported at the last meeting.
2.Virus variants could weigh on economic growth and Real GDP growth was lowered .4% to 5.5% for 2021.
3.Median forecast by Fed officials is 3 rate hikes in 2022 and that is up from zero during the September FOMC. Tightening will happen much sooner than previously expected.
4.Median forecast for 2023 is 4 rate hikes and that is higher
5.Core PCE inflation projections are up by .7% to 4.4% in 2021 (their target is 2% and projections have been 2.5% earlier in the year).
Yesterday I advised swing traders to sell out of the money bullish put spreads before the open. This was a nice dip before the FOMC and I suspected the reaction would be bullish. You should have your positions on. Manage your positions and let time premium decay work its magic. I still view this as a low probability trading environment and I still prefer selling OTM bullish put spreads on market dips.
Day traders, I hope you followed my advice yesterday, “After the statement, if we get consecutive stacked green/red candles through the prior day’s high/low and they have little to no overlap, follow that direction. It is important that you have this EXACT pattern for at least 3 bars. If not, keep your trading light and expect volatility. That is the exact pattern we got after the statement.
This morning I would not chase stocks. Gaps up to an all-time high have frequently been faded. I do not feel that Asset Managers are going to be chasing stocks at an all-time high when inflation is high, tightening is on the horizon and when valuations are at 20-year highs. I also feel that most of the move Thursday was program driven (Quad Witching) and those gains can easily be stripped away. Take a deep breath and watch the open. If I see stacked red candles consecutively with little to no overlap on the open, I will short. If I see the opposite it will be a gap and go formation and I will NOT participate. If I see a compression or tiny drift lower that does not fill much of the gap, I will assume we are going higher and I will spend the first 30 minutes finding stocks with relative strength.
Support is at SPY $470.50. Resistance is at $473.50.
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.