If it doesn’t happen today, it will happen next week.

PRE-OPEN MARKET COMMENTS PAYDAY – I’ve been telling you to stay long all year. Don’t read the headlines and don’t listen to the “experts”. All of that crap is going to make you doubt yourself. Price is truth and today we are going to get paid.

The rally that started in the first half of 2023 told me that any drop from August to October was going to set up a fantastic buying opportunity in November. The strength in November and December told me that we were going to make a new all-time high. The market needed time to digest gains. The dips were shallow and during this compression we made a higher low. The market is a “pressure cooker” and it is ready to blow its lid off.

Traders who took gains after a big run unloaded shares to long-term buyers. That supply has been worked off and those longer-term buyers are getting more aggressive. Fools who shorted the market looking for a double top off of the all-time high are going to take a beating today.  Shorts have no staying power. Major earnings releases will start next week and the mega cap tech companies are on deck. The economy has been strong, job growth is solid, inflation is coming down and consumers have been spending. This is all good news for profits. When shorts cover they fuel the move higher.

The FOMC statement is in 10 days. If shorts felt that hawkish comments would drive the market down, they won’t be around to find out. They are going to be shaken out before then.

The Europe was up overnight and so was Asia (except for China). That gives us a small tailwind.

Today is monthly options expiration. In Max Pain (Option Stalker Pro) you can see how the open interest in the Jan (19) OTM calls has grown much more than the open interest in puts during the last week. That means that we could see gamma kick in on the $480 strike.

“Pete has been bullish. He has been looking for a breakout to a new all-time high. Pete thinks today could be the day we breakout. I’m going to buy some call lottos today.” If you are remotely entertaining this thought, you are an idiot and you will not be trading very long.

For the rest of you who have done your own research and who agree with my market forecast, no need to get excited. You are long bullish swing trades and they are going to perform great today. Even if you don’t do anything else, you are going to make great money. Use that to your advantage. Add to positions on your terms, not because you have FOMO.

I liked the strong close yesterday on volume. If the breakout does not come today (and I believe it will), it will come next week. The $SPY tested the all-time high before the open and we backed off from it. This is a major resistance level so we will respect it.

If the market breaks out above $480 in the first two hours of the day, we are going to see a steady march higher. I do sense that shorts are vulnerable. If we start stacking nice green candles on heavy volume in the first 30 minutes of trading, I would take starter long positions. I am not interested in chasing one or two long green candles that test $480. Those are not sustainable and they are likely to retrace. There is no overnight news to justify a move like that. Next I want to see how stiff the resistance is at the all-time high. If we back off of that level sharply, we might not get through it today. If we get through it with ease on the first or second attempt and it is early in the day, I would add to longs.

This is a gap up. I would consider any drop on the open as a gift. If the move is brief and shallow, we will have a chance to find great longs. We want half of the gap preserved. If the gap is filled with consecutive red candles, hold off. That is a sign that the gap will fill. This scenario is unlikely.

Support is at $477.55 (2023 high) and resistance is at $479.98 (all-time high).