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Game Plan At A New All-time High
www.oneoption.com
Don’t be “FOMO Joe”. There is no need to chase stocks on the open.
PRE-OPEN MARKET COMMENTS MONDAY – The market made a new all-time high Friday. That lasted more than 500 days and it was the 6th longest streak ever. Earnings releases will increase this week, but the mega cap tech stocks are still a week away.
Shorts will be very passive this week. They have no staying power into earnings releases. I believe the market will grind higher.
I would be fairly aggressive with longs this week, but I would start paring back exposure before the FOMC statement. That coincides with mega cap tech earnings. If the market rallies well above $490 in the next week, we could be getting a little frothy and we are likely to see some profit taking. That is not enough to change our bullish outlook, but it is enough to throttle back on our bullish exposure.
The Fed is going to splash cold water on the market. The rate cuts are not coming as soon as the market would like. The ECB and PBOC have been pretty hawkish with regards to rate cuts. Both are pausing.
You should expect a choppy stair-step rally. Right now the iron is hot so you should strike. Then exit into strength and wait for the next dip. This plane is still flying safely on one engine (the US), but the others (China and the EU) are sputtering.
Don’t chase the gap up today. You will have opportunities to get long. I am expecting this breakout to be tested. We want a wimpy test of the gap and half of it preserved today. Once we have support, we can start to enter longs. 1OP will start off in a bullish cycle.
Support is at SPY $480 and resistance is at SPY $490 and $500
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