New Market High – I Told You To Aggressively Buy Calls Yesterday!

February 10, 2017
Author: Peter Stolcers, Founder of OneOption

Posted 9:00 AM ET - I told to the market was going to make a new all-time high yesterday. The table was set and we are finally out of the trading range. We should see follow-through buying for the next week. I am not looking for an explosive move, just choppy price action with an upward bias. The media always finds a reason for the rally. Supposedly Trump's meeting with CEOs sparked buying when he mentioned lowering corporate taxes. They always find a reason. The S&P 500 broke out a few weeks ago and we tested that breakout. When we bounced last week I knew we were going to breakout for good. The price action Wednesday was extremely constructive but we ran out of time. If you recall, Wednesday morning the market immediately probed for support. That dip was short-lived and stocks rebounded quickly. That was a sign that buyers were engaged (even near the all-time high). Economic conditions are improving domestically. ISM services, ISM manufacturing and the jobs reports were strong. Global economic activity is also increasing and China just released strong trade numbers. The Fed sees balanced economic risks and they voted unanimously to keep rates unchanged. This was a dovish statement and most analysts believe the next rate hike will come in June. As earnings season has been decent and guidance has been good. The market broke out because of these influences, not Trump’s comments to CEOs. Swing traders should have a full position of calls. I told you to buy more calls yesterday if the market trades above the all-time high and I told you to add if the SPY closes above $230. I even used the work aggressive in the header – WHICH I RARELY DO. Now it's time to manage your profits. Keep your stop at SPY $229.60 on a closing basis. As the market continues to float higher, we will raise the stop. Day traders, you should have made a killing yesterday. We started buying right out of the gate and everything rallied. I told you my comments that any dip on the open would be brief and that you should aggressively buy early in the day. Look for steady price action today with a small grind higher. I don't think we will see an explosive rally ahead of the weekend. Stay long. . . image

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