Daily Commentary: January 26, 2024

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Trading Game Plan For Today

Posted by Pete Stolcers on January 26
www.oneoption.com

The hour is late. We’ve had a nice run and with major news approaching we want to take gains in the next two days.

PRE-OPEN MARKET COMMENTS FRIDAY – The market has been able to hold the gains for the week and the bid has been tested the last two days. We’ve had economic releases and earnings announcements and buyers are still engaged.

I still expect to see some buying pressure into the close Tuesday, but I would take that opportunity to take some gains. Mega cap tech earnings are on deck and those stocks are on their highs. Good news is priced in and surprise favors the downside.

Overnight more semi-conductor companies reported and the reaction has been negative. After a powerful run, I would take gains in this group and I am seeing some bearish engulfing candles D1 off of a relative high. Respect these warning signs. I would suggest doing the same for any tech company that has surged higher and that have bearish engulfing candles D1. You don’t have to panic out of these stocks, but the hour is late.

I AM NOT BEARISH!!!!

The market does not go straight up or straight down. We were looking for a move higher and we want to sell into strength especially when we have a “heavy” calendar next week. We want to take gains and we want to wait for a better entry point.

For day traders, I would still favor the upside, but not for stocks that are “extended” and that are going to announce next week. You have no staying power and if you chase them, a drop would trap you. Shorts are going to be passive at an all-time high with major news pending so we should see some upside today and Monday. Tuesday the action is likely to die down as we wait for earnings and the FOMC.

Overseas markets were up nicely in Europe and up marginally in Asia.

Support is at SPY $480 and resistance is at SPY $490 and $500

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