© Copyright 2023 eOption, a division of Regal Securities, Inc., Member FINRA
| 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 firstname.lastname@example.org 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.
Get Your Wish List Together On This Market Drop – Be Ready To Buy
Unlike the major financial new outlets, I don’t try to justify every wiggle and jiggle in the market. The fact remains that there are buyers and sellers and that this is a “dead spot” for the market. Economic numbers will spark some activity today and tomorrow, but after those releases the action will die down. I am expecting a trading range for the next month and a half. Buy dips and take profits near the all-time high… repeat.
Stock valuations are rich and another quarter of healthy profits will bring them back to a more normal level. Inflation worries will take time to resolve and many analysts believe that the Fed’s forecast is too conservative. We have further evidence of inflation in some of the overnight news. The Fed may have to discuss a timeline for tapering and tightening of any kind will spark profit-taking. China’s market is in bear territory and I don’t believe the S&P 500 will break out until we see traction in Asia. These forces are keeping a lid on the market.
Domestic economic conditions are improving rapidly. ISM manufacturing was above 61 yesterday and that is an incredibly strong number. ISM services will be released today and ADP reported that almost a million new jobs were created in the private sector during the month of May. ADP was incredibly strong and that bodes well for the Unemployment Report tomorrow. I’m expecting a big upward revision to April’s number. The key component to watch Friday is Hourly Wages. If it is greater than .7%, it will spark inflation fears.
The opposing market forces are strong and I believe the S&P 500 will stay in a trading range between 4000 and 4200 for at least a month. Don’t chase rallies, buy dips.
Swing traders should be on the sidelines waiting for the next market drop. Have your bullish stocks ready because you won’t have more than a day or two to enter your bullish put spreads. Stocks with relative strength and heavy volume that are breaking out through technical resistance are your best plays. Sell the out of the money bullish put spreads below technical support and let accelerated time premium decay work its magic. This is a light new cycle and we are heading into the summer doldrums. A drop to the 50-day MA on the SPY would be a good level to sell another round of bullish put spreads.
Day traders should take advantage of sector rotation. Yesterday MEME stocks were on fire; today they are giving those gains back. The “hot” stocks change daily and Option Stalker searches help us find the best day trading opportunities. Yesterday I said that I don’t believe that the market will have a sustained rally until the downside is tested. Tuesday’s gap reversal revealed selling pressure and Wednesday we saw late day selling. This morning the S&P 500 is down 30 points before the open and overseas markets were weak. This is a low probability trading environment and you should trim your size and your trade count. Down opens provide the best day trading scenario because relative strength is easier to spot. Wait for market support and buy stocks with relative strength and heavy volume when they are breaking through technical resistance on a daily chart.
Support is at SPY $412 and $418. Resistance is at $422.
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.