Daily Commentary: July 13, 2018

Scott Green1Option Commentary

We Are Long Calls – QQQ New All-Time High – Let Them Run

Posted by Pete Stolcers on July 13

The NASDAQ 100 made a new all-time high yesterday and tech stocks are leading the charge ahead of earnings season. Big banks are announcing this morning and financial stocks could propel the SPY above key resistance at $280. Tariff concerns are overshadowed by corporate profits and under allocated Asset Managers will be scrambling to get long.

Trade tensions are escalating globally, but investors sense that deals will be negotiated. Trump needs momentum heading into the November elections and a market correction due to trade wars would keep Republicans from gaining seats.

Trump is rattling his saber during his European tour. Monday he will meet with Putin and I expect more negative than positive to come out of the meeting. The market impact will be negligible.

Earnings are expected to rise 21% this quarter and the S&P 500 is trading at a reasonable forward P/E of 16. There is room to the upside, but the index needs help from financials. Banks will benefit from a strong economy and rising interest rates. Wells Fargo and Citigroup are down after reporting and J.P. Morgan Chase is a little higher. As banks go, so goes the S&P 500 today.

Swing traders are long IWM at $166 and we will use $167 as a stop on a closing basis. Yesterday we also bought QQQ and we will use $178 as a stop on a closing basis. The market has been able to shoulder all of the bad news and that is a bullish sign. As stocks move higher we will raise our protective stops.

Day traders should look for an early opportunity to get long. I believe that any retracement will be brief. Use the first hour range as your guide.

Stay long and focus on tech stocks. Earnings season has started and buyers are engaged.


Market commentary provided by OneOption, LLC a firm separate from and not affiliated with Regal Securities L.P. Regal Securities L.P. has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

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