Earnings Season Will Attract Buyers – New Market High This Week

January 9, 2017
Author: Peter Stolcers, Founder of OneOption

Posted 9:20 AM ET - The price action last week was bullish. The market finished the year on a soft note and support at SPY $225 was breached. Stocks rebounded last week and we closed above that support level. Hawkish FOMC minutes did not discourage buyers and the market closed within striking distance of the all-time high. Earnings season will kick off this week and that typically attracts buyers. Tech stocks are starting to catch a bid. January is typically a bullish month and as the first week goes, so goes the year. Stocks recovered nicely last week and I am expecting a new all-time high this week. Jobs are not growing at the pace we would like to see. ADP and the Unemployment Report were both light. However, ISM manufacturing and ISM services were very strong. In the next few months we could see a pop in employment if business regulations are eased. The promise of an Obamacare repeal could also fuel full-time employment. I am expecting a nice grind higher this week. Swing traders can buy a few calls and hold them overnight. When we make a new all-time high and when we see follow-through, we can get more aggressive. Until then, keep your overnight positions relatively small. I will be day trading from the long side. I want to make sure the market bid is steady before I buy. Oil is down a bit and that could weigh on prices early. Once market support is established I will start scaling in. I feel more confident trading from the long side when oil is up or flat so I will trim my size a little today. This could be a quiet start to the week. If we take out the first hour high I will get a little more aggressive. We should see some buying this week. . . image

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