If This Happens the Market Will Make A New Low In June
One Option Trading Blog
by pete@oneoption.com
1y ago
Posted 9:30 AM ET - We are still up one day and down the next. The volume is light and the intraday action is very choppy. China is rapidly reopening and that is a good sign. Australia raised rates and the ECB is expected to. The FOMC meeting starts in a week. We have CPI on Fri. Rising interest rates will create some nervous jitters. If we zoom out to a weekly chart we can see an acceleration in selling pressure. I suspect that the move last week was short covering and we need to watch the half way point of ..read more
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Here Is Your Game Plan For the Next Two Weeks
One Option Trading Blog
by pete@oneoption.com
2y ago
Posted 9:30 AM ET – Expect a choppy downward bias at least until the July FOMC statement. After big moves down, expect a bounce that lasts a few days. That means you have to keep your trades short term. Short stalled bounces and take gains on deep drops. The issues that have been plaguing the market are not going to be resolved this summer. Economists are lowering growth projections for China. Covid-19 is spreading in Beijing and GDP growth of 3.7% is expected for 2022. The PBOC is concerned and they cut rates when the rest of the world is raising ..read more
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Exit SPY Today - We Will Wait For A Better Entry Point
One Option Trading Blog
by pete@oneoption.com
2y ago
Posted 9:00 AM ET – In the last few months I have outlined a myriad of issues that are plaguing the market and they are growing, not subsiding. Inflation, war, rising interest rates, supply disruptions, a deceleration in global economic growth, a resurgence in Covid-19 and drought top the list. These issues will not be easily resolved and they will impact corporate profits. After a 12-year market rally the market bid remains strong and investors are conditioned to “buy dips”. This battleship is hard to turn. As the selling pressure builds, that temptation to buy dips subsides. That means the m ..read more
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Get Short - I Don’t Like the Market Backdrop Here
One Option Trading Blog
by pete@oneoption.com
2y ago
Posted 9:30 AM ET – The big news overnight is that the PBOC cut interest rates and that sparked buying in Asia. The market is weak and the price action this morning is nothing more than a bounce. There is a negative market bias and the move lower is very choppy. This was a timely rate cut by China. Overnight several brokerage firms cut their growth forecasts for 2022. Covid-19 has spread outside of quarantined areas and an estimated 2400 Chinese hedge funds have been hit with margin calls. Property developers are perilously close to default. Wars, inflation, recessions and viruses ..read more
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The Selling Pressure Is Building - These Are the Warning Signs
One Option Trading Blog
by pete@oneoption.com
2y ago
Posted 9:30 AM ET - Yesterday was one of the weakest days we have seen in the last two years. The selling pressure is building as the Fed prepares to raise interest rates. Inflation is running hot globally and China’s economic growth is decelerating. The market still has plenty of work to do on the downside and the S&P 500 is down 40 points before the open. Wars, inflation, recessions and viruses can all be resolved in time. Credit is the one issue that can lead to sustained market declines. High yield bonds (junk) are retreating and that is an early ..read more
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Nice Overnight Market Bounce - Lot’s of “Fed Speak” Today
One Option Trading Blog
by pete@oneoption.com
2y ago
Posted 9:30 AM ET - PRE-OPEN MARKET COMMENTS TUESDAY – The S&P 500 was able to hold onto gains from Friday during yesterday’s session. That has attracted buyers this morning and the S&P 500 is up 60points before the open. It will clear a horizontal resistance level at SPY $406 and global markets are providing a springboard. The incremental news overnight is fairly light. China has some improvement on the Covid-19 front and that is sparking optimism. Their retail sales were down 11% and I can’t recall seeing a drop of that magnitude even during the onset of Covid-19 two years ..read more
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Market Price Action Is Bearish - Not Likely To Improve Until Fall
One Option Trading Blog
by pete@oneoption.com
2y ago
Posted 9:30 AM ET - Last week we were focused on the reaction to the FOMC statement and a relief rally off of the low of the year was likely. In March the SPY started to bounce before the statement and that was a sign of pent up buying. The lack of interest into this announcement raised red flags. In March the bounce lasted 2 weeks. This time around it lasted two hours. These are signs of heavy selling pressure and I pointed them out last Friday. The S&P 500 is down 70 points before the open and the market is ..read more
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FOMC Bounce Was Only A Bounce - Here’s the “Tell”
One Option Trading Blog
by pete@oneoption.com
2y ago
Posted 9:45 AM ET - Yesterday the market was bracing for the worst possible news from the Fed. Their intentions have been clear and they delivered. The table was set for an oversold bounce off of the lows for 2022 and buyers fueled a nice rally once the press conference started. Unfortunately, some of those gains are being given back and the S&P 500 is down 30 points before the open. The Fed hiked interest rates by 50 basis points and they a leaning towards another 50 basis point rate hike in June. The one piece of dovish news is that ..read more
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Fed-Day - Market More Likely To Bounce Than Tank - Let’s See
One Option Trading Blog
by pete@oneoption.com
2y ago
Posted 9:30 AM ET - PRE-OPEN MARKET COMMENTS FED-DAY – I am expecting a relief bounce after the FOMC statement. Notice that I used the word bounce, not rally. I have noticed some subtle changes between the price action in March and the price action in the last week that are forcing me to temper those expectations. I describe them below. There are still many unresolved issues that will weigh on the market this summer. The biggest will be economic activity. The fear of higher interest rates is that it will lead to a recession. We will not have that piece ..read more
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This Is What I Am Expecting After the FOMC This Week
One Option Trading Blog
by pete@oneoption.com
2y ago
Posted 10:30 AM ET - We are likely to see nervous jitters for a few more days and then I am expecting a relief bounce after the FOMC statement. Notice that I used the word bounce, not rally. There are still many unresolved issues that will weigh on the market this summer. The low for the SPY in 2022 was $410.60 and I believe we will test that before the FOMC statement Wednesday. There are many positive and negative influences and that is creating extreme market volatility. Buyers flex their muscles and buy programs kick in. The next day sellers take ..read more
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