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Here’s What To Expect This Week
www.oneoption.com
The holiday is likely to disrupt trading and the market will float back to the middle of the long red candle from Thursday.
PRE-OPEN MARKET COMMENTS MONDAY – Last week was crazy and now the market will regroup as we head into the holiday. There are some economic releases, but they are fairly minor. This morning we are testing the highs from Friday and that will be the first hurdle. If we get through it on the first attempt with nice long green candles and some volume, the market will try to recover more of the losses from last week. If the market struggles to get through resistance, it is a sign of selling pressure and the action will be choppy today.
There are a few takeaways from last week. 1. Sellers have some control. The trend is starting to weaken. 2. Much of the drop Thursday was program generated. We are seeing a bounce this morning. 3. The activity is going to die down as the week progresses. 4. Keep your swing exposure very short term and focus more on overnights and day trades. Big two sided moves are a sign of volatility and the market has the potential to go either way.
I mentioned early Friday morning that we had a real opportunity to sell some put premium. You had to act in the first hour of trading or you were going to miss the boat. Once the bounce was underway it happened quickly and the option IVs imploded. Now it is too late to sell premium.
My video from Sunday highlighted this opportunity and I suggest you watch it. The video also includes my market analysis for the week ahead. My AVGO and TSLA put credit spreads are going to benefit from the weekend of time decay and the big move up this morning. Sometimes know what is NOT going to happen is as good as knowing what is going to happen. The odds of another huge leg lower this week were unlikely and that is what I was leaning on.
Support is the 100-day MA and resistance is the $665.
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