© Copyright 2024 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.
Market Makes A New High On CPI
www.oneoption.com
The SPY rallied on the news. Don’t chase, wait for support.
PRE-OPEN MARKET COMMENTS THURSDAY – The market has been very strong the last few weeks, but the rally has come on light volume. That is not bearish, but it is a sign that the level of conviction is low. We’ve seen many gaps up. Some of them stick and some of them reverse. In every instance there was a “bid check”. Trading programs test to see how strong the bid is. Once that confirmation of support is established a buying opportunity sets up. The same will be true today. The big initial overnight gains have been stripped away and we are already seeing signs that a move higher will be challenged.
The CPI declined .1% and an increase of .2% was expected. Core CPI was up .1% and an increase of .2% was expected. This will give the Fed more breathing room to ease if they need to. Initial jobless claims (222K vs 236K last week) were lower than expected and economic growth remains strong. Lower inflation and strong employment is good for the market.
Good news is priced in and the S&P 500 rallied more than 50 points yesterday. Traders were expecting a low inflation reading. The gains from yesterday will be tested. Be patient and evaluate the price action. The temptation will be to pile in on the open. FOMO Joe is thinking, “Hey, inflation is low and we have good job growth! That’s good news for the market and it’s not gapping up on the news. I’m going to buy the open, this is a bargain.” Don’t fall into that trap.
This is good news for the market, but there are no bargains at this level. There is no need to chase anything. Let the dust settle and if the market holds the gains from yesterday, you will have confirmation of support and you can buy mega cap tech stocks. That is where all of the market strength is now. If we see profit taking you will be happy you waited.
The next two weeks are seasonally bullish. Earnings season will kick off tomorrow, but we will not hear from big tech until the end of the month. That is also the next FOMC meeting. The recent market gains have come on light volume and means the market is vulnerable to a pullback. Everyday the bid is tested before we move higher.
There are opportunities to make money, you just have to wait for your set-ups. We never know when we might see profit taking. Watch for any smack down from the high of the day on heavy volume with stacked red candles. We probably will not see that for a few weeks, but that will be a sign of profit taking/resistance.
Support is the low from Wednesday and resistance is the high from pre-open trading (SPY $563.52)
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.