Daily Commentary: October 29, 2024

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Be Ready To Trade

Posted by Pete Stolcers on October 29
www.oneoption.com

The last few weeks have been boring, but that’s about to change.

PRE-OPEN MARKET COMMENTS TUESDAY – Major news events will hit the market in the next week. Traders have been waiting patiently and that is why the market has not moved much.

After the close today, Google will report earnings. Meta and Microsoft will report tomorrow after the close. Thursday Apple and Amazon will report. In general, tech reactions have been positive. Economic growth has been stable and the results should be good.

ADP and GDP will be released tomorrow before the open. I am expecting good results from ADP (110K expected) since the initial jobless claims numbers have been steady at around 230K. This will be our first look at GDP (3% expected). Based on recent data points the number should be solid. Even if it is a little soft, buyers will support the market on the notion that the Fed has room to ease. I believe that Friday’s jobs report will also be good. I’ve seen this number manipulated ahead past elections and there is no reason to believe it won’t be inflated this time. This is not Pete’s conspiracy theory. The BLS has stated so in the past and we see adjustments in the following months. I believe it will come in around 160K (108K expected).

Consequently, I feel the odds of a breakout to a new high are better than the odds of selling ahead of the election. The market has been treading water near the all-time high and this pause for the last 3 months has given the bid a chance to strengthen.

Next Tuesday we will have the election. The worst case scenario is a close race that requires recounts. That would lead to chaos. The best case is a clear win. Either way that will remove uncertainty from the market and we could see a relief rally. Regardless of the winner, it will take months before the policies are implemented and even longer for them to take root.

The FOMC meets next Thursday and that is also a big event. The Fed has stated that they are on the path to easing and we will be able to gauge their level of commitment. The 50 basis point rate cut seemed a bit aggressive last month and I believe they will not cut rates.

This should be the last dull day. Be patient and wait for your set-ups. I would prefer an early drop and signs of support at the low from Monday. I would like to see a series of bullish candles off of the low (not just one or two long green candles). A move on decent volume would also confirm support. Given the recent price action, expect a low probability environment.

Support is at AVWAPQ and resistance is at the all-time high.

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