© Copyright 2024 eOption, a division of Regal Securities, Inc., Member
FINRA/
SIPC |
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 support@eoption.com 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.
Powell Splashes A Little Cold Water
www.oneoption.com
Yesterday the Fed Chairman suggested that the Fed is not in a hurry to lower rates.
PRE-OPEN MARKET COMMENTS FRIDAY – The market has been digesting recent gains and the price action has been compressed this week. The inflation numbers have been inline (CPI and PPI) and initial jobless claims were good (217K). Retail sales were better than expected this morning (.4%). There hasn’t been a catalyst until Powell’s statement yesterday. Economic growth is solid and the Fed does not feel they need to rush interest rate cuts.
As I’ve been mentioning this week, Asset Managers are not going to chase an all-time high. They will wait for the gains to be digested. As time passes, there might be a news release that sparks a little selling. They will assess the level of profit taking and they will buy dips once support is established. That’s exactly what we should be doing.
Economic growth is good, inflation is tame, job growth is intact (strikes and storms have ended), earnings season is excellent, the Fed is relatively “dovish” and we are in a period of seasonal strength. As far as I’m concerned, the long-term trend will remain intact and the Fed has the latitude to ease… if they want. This is a good backdrop. Yes, President elect Trump will spark some volatility, but I believe that will be more pronounced in 2025 when he takes office.
The first support level is at $589.20. That is the post-election gap higher. If that support fails we will fill the gap and test $586. That is the previous all-time high and I believe that will hold. The selling pressure yesterday was not very well organized, but the overnight move lower has been steady. Overnight markets were generally soft so there is a headwind.
From a swing trading standpoint, we have a starter position on at lower levels and we added another leg around this level. I would stick with those positions and I would watch for support at the levels I’ve outlined. If we get a nice bounce in the next day or two, it will be a sign that buyers are still engaged and we can consider adding. I have a rule that has served me very well in the last two decades. “Never swing trade from the short side the last two months of the year. You don’t have to be long (cash), but don’t be short.
From a day trading standpoint I would be very patient with longs today. There’s a good chance that we will see selling the first couple of hours and it could last most of the day. The exception would be a couple of long green candles right on the open that erase most of the overnight gap (unlikely). That would be a sign that buyers are going to scoop this dip and we might be able to buy if that move holds an hour into trading. We are going to probe for support.
Support is at SPY $589.20 and resistance is at the close from yesterday.
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.