© 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 Is How I Plan To Swing Trade This Market Drop
www.1option.com
The warning signs were there and we were waiting for the market drop. The FOMC Minutes were a splash of cold water Wednesday and the market pulled back off of its high. Yesterday the market paused ahead of the jobs report and the reaction this morning has been slightly negative.
Analysts were expecting 479K jobs and 199K were created. I do not trust the government’s numbers because they are impacted by holidays, adjustments and local offices reporting correctly. ADP processes payroll checks and they have no agenda. They know how many checks they cut and they reported 807K jobs in the private sector. I do have one component of the jobs report that I track. Hourly wages went up .6% and that is high. This is the largest input cost for companies and it is inflationary. For that reason I view the number as bearish for the market. US 20-Year Treasuries (TLT) is dropping and it is close to a major technical support level at $141. If that is breached it will provide a stiff headwind for the market.
Swing traders, find stocks with relative strength. If the last price is in the upper right hand corner of the daily chart, it could be a good candidate. Lean on those major technical support levels and try to get 20-25% of your bullish put spreads on today if the 50-day MA holds. Keep the majority of your powder dry for the next leg lower and continue to wait for support to be confirmed. If the SPY tests the 100-day MA, it won’t be there long. A bounce off of that support level is where you can add the rest of your bullish put spreads. We want a bullish hammer on a daily chart or a bullish engulfing candle after testing the 100-day MA on SPY. Buyers are typically engaged ahead of earnings season and I am expecting the 100-day MA to hold for at least a few weeks.
Day traders should watch the open. The reaction to the unemployment report has been mixed and yesterday we flat-lined in a tight range. My favorite scenario would be a small bounce on the open that loses its momentum in 30 minutes. Tiny bodied candles will be a sign of resistance and 1OP will start the day with a bullish cross from a deep trough. If the duration and magnitude of the opening bounce is meager, I will be looking to short the first bearish 1OP cross. I do NOT believe that Asset Managers are going to rush in and buy this dip yet. They need more proof of support and I feel that we will see more selling pressure in the next few days. If I see long green candles stacked consecutively with little overlap on the open, that will be a sign of strength. This scenario is unlikely (10%). Long red candles stacked early would be bearish and if we take out the 50-day MA with ease on the first attempt that would be bearish. I would still want to see what happens during the pending bullish cycle on 1OP. Let the price action unfold. In the last 8 trading days we have only had one day with a decent range. The rest have been very tight compressions with little to no direction. Be patient and wait for one or two windows to set up during the day.
In the next day or two we will have follow though selling. I do not believe that we will see a decent, sustained rally until that low is set and tested. Be patient.
Support is at the 50-day MA and resistance it at $471 and the all-time high.
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.