Traders Give Politicians the Benefit of the Doubt – Use This Stop For QQQ Calls
Posted by Pete Stolcers on June 5
Yesterday the market gapped higher and it flat lined the rest of the day. It was able to hold the gains and the SPY closed above horizontal resistance at $274. That is a bullish sign and traders are ignoring the dark clouds.
Steel tariffs have been imposed on Canada and Europe. If these tariffs are imposed on China they said that all negotiations in the last month would be nullified. Trade wars sparked selling three months ago and they are still possible. Europe plans to retaliate with tariffs and that news will not be well-received.
The Fed will raise rates next week and the market is prepared. Traders will scrutinize the comments and any talk of accelerated tightening in 2019 could be problematic.
The North Korean summit will take place next week. Two unpredictable leaders will try to find middle ground and this meeting could have a positive or negative outcome.
Economic releases have been strong and the jobless rate is at an 18-year low.
Dark clouds loom and a lightning strike can happen at any time.
Swing traders are long QQQ at $174.40 based on yesterday’s instructions. Use a close below QQQ $173 as your stop. Tech stocks have been leading the charge and they are strong relative to the market. This will provide some cushion if the market drops.
Day traders should use SPY $274 as a guide. If we are above it, favor the long side. If we are below it, favor the short side. The first hour range is also an excellent guide for day trading. Once the momentum is established, go with the flow. The news is fairly light and I believe the range will be tight today. Trim your size and your trade count.
The market is giving politicians the benefit of the doubt and a number of issues will play out in the next two weeks. I am keeping my overnight exposure to a minimum.
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.