As Long As the Market Stays Above This Key Level I Am Bullish

Posted 9:30 AM ET - The market is trapped in a range and it lacks a "driver". Stocks were able to shoulder hawkish Fed statements this week and the breakout is holding. With each passing day the bid should strengthen. North Korea is flexing its muscle, but the market is ignoring the saber rattling. The US has imposed additional economic sanctions and China is restricting banking activity with North Korea. Stocks are down this morning on the news, but this won't spark a major round of profit-taking. Europe's flash PMI was much better than expected. In general, global conditions are consistent with moderate growth. Politicians are scrambling to get some points on the board, but they seem miles away from a deal on health care or taxes. The first week of a five-week expiration cycle is typically dull. Daily ranges have been tight and we can expect the same today. Day traders should let the market come in and once support is established, they should start scaling into long positions. The damage will be relatively contained with support close by at SPY $248. Swing traders should be long calls. Use SPY $248 as your stop on a closing basis. Support is at $248 and resistance is at $251. That range is so tight that one good move will push us through either side. Favor the long side and use $248 as your guide. . .

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