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Dead Till the Fed
www.oneoption.com
The market will be in a holding pattern until the FOMC statement tomorrow.
PRE-OPEN MARKET COMMENTS TUESDAY – I wish I had some great exciting news to share with you, but I don’t. The market sold off Friday and it rebounded Monday. This was triple witch related and we are in a holding pattern until the FOMC tomorrow.
The market has been able to hold all of the gains since Nov and that is a good sign. There have not been any dips so buyers are still interested. When we do get a dip, it will be brief and shallow and it might come Wed. A little move lower would be nice so that we can sell some bullish put spreads. I would also like to flush out some bullish specs.
Others are waiting for that dip as well and that often means we won’t get one. The Fed is likely to be hawkish. That is no surprise, they have been very vocal. If the market has little to no reaction, we could just start to grind higher. Those who were wanting a dip and thinking that this might be the catalyst will start to get anxious and the bid will strengthen. I still prefer to wait for the outcome.
If you are entering bullish swing trades now, you will have to weather the potential risk of a negative reaction. You might feel that this is going to be a “nothing burger” and you could be right. Option IVs are dirt cheap on stocks so I don’t like selling BPS here. We need the stocks to come in a little and we need to get those premiums up. Even a 2-3 day drop would help.
Support is the high from Fri and resistance is the high from Mon. We are likely to set the range in the first 90 min and then stay in it the rest of the day.
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