© 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.
Stock Market Is Addicted To Easy Money and the Next “Fix” Is Coming
www.1option.com
The stock market is grinding higher on the notion that a stimulus bill will happen one way or the other. If politicians can’t agree on a deal before the election, it will be the top priority for the winner. The market is addicted to easy money and it only cares that the next “fix” is coming soon.
Earnings season will begin this week. Profits are expected to decline more than 20% year-over-year, but that is better than the 25% drop that was expected for Q3 a few months ago. Only 69 companies in the S&P 500 have provided guidance (down from 104 companies typically). Banks have beefed up balance sheets in anticipation of bad loan write-downs and they will dominate the earnings scene this week.
The Coronavirus has been very stubborn and we are heading into flu season. It’s estimated that there is $35 billion in unpaid rent and state and local governments will have a tax revenue shortfall of $560 billion. The public sector employs 14.5% of the US workforce so cuts to state and local governments should be expected.
Amazon Prime Day starts tomorrow. Target, Best Buy and Walmart are getting in the act by offering big online savings. Retailers are hoping to spread out retail sales ahead of the holiday season.
Big tech companies are under fire by the EU/US law makers. Antitrust laws are being considered and last week a House subcommittee said Congress should consider breaking up some of the companies.
From a technical perspective, the market wants to go higher and looks poised to challenge the all-time high. Stock valuations are rich at a current P/E of 23 and I prefer to sell out of the money bullish put spreads that expire before the election. I am focusing on stocks that have a tendency to rally into earnings announcements and I am selling these bullish put spreads below technical support inside of a three week window. This strategy allows me to take advantage of accelerated time decay. Relative strength, heavy volume and strong technical support are common to all of my picks. I suggest being relatively passive given current valuations and a backdrop filled with uncertainty.
Day traders should wait for the bid to be tested this morning. Once support has been confirmed, buy stocks with heavy volume and relative strength that are breaking through technical resistance. Chinese stocks have been particularly strong and their economy has a head start on the rest of the world. Heavy Buying, Relative Strength 30, and Bull Run are my favorite Option Stalker searches. Today is a banking holiday and the volume should be light. I’m expecting a fairly tight trading range and lower than normal volume. There wasn’t any incremental news over the weekend to fuel a big rally today. In my opinion, this is pure momentum and we rallied above key technical levels last week.
Support is at $345 and $342.50. Resistance is at the all-time high.
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.