Stock Option Trading Strategy – Keep trades small. Wait for major earnings relases after next week.

The Unemployment Number came in the stronger than expected and wage inflation was contained. That news initially pushed interest rates higher and the 10-year yield went back above 5.2%. The market reacted negatively and the S&P 500 futures traded down three points. After digesting the news, the market realized that full employment and higher wages were actually good for the economy. Today, the market is inching closer to its all-time high. I believe that there will be a positive bias to today's action but I'm not expecting a big rally in this light trading environment. Trading during the last couple of Friday's has seen afternoon weakness. Consequently, I think the market will establish an early range and prepare for next week. The new earnings season will kick off Monday with AA’s release. The activity will pick up after next week when the first round of big releases hits the market. Until then, I suggest keeping your positions small.

Daily Bulletin Continues...