Daily Commentary: June 26, 2023

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Is the Ukraine News Bullish?

Posted by Peter Stolcers on June 26
www.oneoption.com

It is still too early to tell what impact the Wagner Group’s withdrawal will have on the war. European markets were down slightly.

PRE-OPEN MARKET COMMENTS MONDAY – I don’t have much to add since the video I posted Sunday. Durable goods orders and the third estimate of GDP are not likely to move the needle much this week. Official PMIs are not likely to have much of an impact either since we got the flash numbers a week ago. China does not release a flash PMI so we will get a fresh look at their month Thursday. We had “Fed Speak” last week during Powell’s Congressional testimony so Fed comments are not going to have much of an impact this week. This is a 4-day holiday coming up for all intents and purposes. I plan on taking next Monday off. We are likely to see a little more selling pressure in equites the next few days as Portfolio Managers rebalance into the end of the quarter. Given T+3 settlement on equities, this influence should wane after Tuesday.

We should respect the selling pressure late Friday. That drop was the best volume of the day and the market closed near the low. The futures are flat this morning and 1OP is in a bearish cycle. We want the low from Friday to hold as it completes and we want to see nice stacked green candles off of the low with decent volume during the bullish cycle. If we get that we could see a decent bounce. If we do not get that early bounce, we could leak lower. Overseas markets were a little soft. Europe was down slightly and if there was going to be a rally related to the new in Ukraine, we would have seen those markets up nicely. My conclusion is that it is still too early to tell what impact the Wagner group’s withdrawal might have on the war.

The volume has remained light as the market retraces from the high that was set over a week ago. I still view this as a normal pullback in a bullish trend. We are seeing some rebalancing and profit taking. As long as the decline does not get organized, I am still favoring a buy the dip approach on the very strongest stocks. Expect light volume and compressed intraday ranges this week as we head into a holiday. Be patient. Find the strongest stocks while the market probes for support. Wait for tails or a  bullish hammer/bullish engulf off of the lod and a bullish 1OP cross. Make sure all of the checkboxes are marked.

Support is at $430 and resistance is at $436.60.

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