Buy Calls – We Should See 3-4 Days of Good Price Action – Target: 100-Day MA

Posted 9:30 AM ET - Yesterday, the market surged higher and it reversed the rest of the day. Greece had not submitted a proposal and they were right on the deadline. Now an agreement is close at hand and I don't believe the rally this morning will pullback very much. Rumor has it that Greece submitted a proposal that is seriously being considered by European officials. The likelihood of a deal this Sunday is high. Unfortunately, this won't have a long-lasting market impact. This will be a nagging issue until Greece eventually defaults. Stocks in China posted gains and this is the second consecutive positive day. We don't know the magnitude of this bounce, but it's safe to say that is support level has been established. Stability in China is much more important than a Greek deal. I believe we will see 3 to 4 days of positive price action. That has been rare in recent months. For the first time in weeks I will hold some overnight call positions. I will also be selling out of the money bullish put spreads. The market will open with a bang. Take a few positions, but keep it small. During the first hour if the retracement is small, we will grind higher the rest of the day. Keep adding as we move higher. If the market pulls back during the first hour and we drift lower, wait for support before adding to your positions. This scenario is unlikely. Once support has been established, add to your long positions. Either way, you want to be buying today. Earnings season has kicked off and that will attract buyers. The market bid has been strong and anyone looking to buy a dip is getting anxious. I am not looking for a massive rally, but we should see 3 to 4 days of decent price action and I don't believe we will test the 200-day moving average before July options expiration. We could test the 100-day moving average next week. . .

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