Market Wants Float Higher – Stay Long and Weather Speed Bumps

Posted 9:30 AM ET - The market staged a nice breakout last week and we are seeing follow-through this morning. Tech stocks have lagged, but they should catch up as earnings season begins. Any dip will be a buying opportunity. Equity markets are trading today, but fixed income is closed for Columbus Day. I am expecting a fairly quiet day. The FOMC minutes well be released on Wednesday and GDP on Friday. I am not expecting any surprises from either. JPM and C report on Thursday. Financials have run hard in the last month and they could be over-extended. Earnings will crank up in two weeks. Swing traders should stay long and they should weather any small pullback. Use SPY $251 as your stop on a closing basis. Day traders need to be very patient this morning. Opening rallies have typically reversed early in the day. Once support is established you can start buying. The action will be very quiet and conditions will be tough. I have been focusing more on swing trading since the "meat of the move" has come overnight. I still suspect that bullish speculators will get flushed out in a one-day drop of 20 to 30 S&P points. It can happen any day. If the market reverses quickly off of the early high it could happen today. When it happens buyers will pull bids and bullish specs will hit the exits. Once the intraday momentum is established the market will continue to drift lower. Stocks will bounce the next day. I don’t know when we will get the drop, but we are due for this move. If you exited October calls last week and you are on the sidelines, wait for this pattern and buy on support. This will be a very quiet day. Position yourself for a grind higher the next two weeks. . .

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