Daily Commentary: May 21, 2024

Auto Post1Option Commentary

The 2 Week Market Game Plan

Posted by Pete Stolcers on May 21
www.oneoption.com

Here’s the game plan for the next two weeks.

PRE-OPEN MARKET COMMENTS TUESDAY – The drop in JPM yesterday rattled the entire financial sector. If the market is going to grind higher, that bleeding needs to stop today. The market won’t be able to move higher if that sector can’t recover. The market has not been able to add to the breakout and the longer it sits here, the greater the odds that we will see some retracement. NVDA and the FOMC minutes are the big news events for the week and they will spark some movement. To reinforce my thesis that the market is going to float higher for the next two weeks, we need to see a new ATH this week and Thursday will be critical. If the market pulls back this week, the open from the breakout candle needs to hold. That support is SPY 525. A test of that support would be less bullish than follow thru this week, but still acceptable. It will be a sign that the next leg higher is not likely to be that strong and that we need to temper our expectations. A close below $525 would have me on high alert and I would be inclined to take gains on longer-term swings. 

Recap:

1. If we make a new all-time high Thursday, we should get a nice float higher. That is our most bullish scenario and it is not worthy of taking aggressively long positions (remember the dip in April?). 

2. If the market checks the $525 level, that is OK, but our expectations for this last push higher are tempered and we are riding as long as we can with one foot covering the brake. 

3. If we have a close below $525, take gains on swing longs and wait to see what happens during the next round of big economic releases the first week of June. 

We have a holiday coming up and the news is light. Expect dull action.

I will not be posting market comments until June 3.

Trade well.

Live Trading

Open an Account

Paper Trading

Register