Table Is Set For A Rally – Wait For This Pattern and Then Buy!

January 19, 2016
Author: Peter Stolcers, Founder of OneOption

Do you trade everyday? GET ALL OF MY RESEARCH FREE Posgted 10:00 AM ET - Last week we experienced extremely heavy selling and the market tested major support at SPY $187.50 on Thursday. We fell below that level on Friday and the selling was fueled by option expiration. Fortunately, we saw a bounce and the market was able to close at $187.50. The volume was extremely heavy and this could mark a capitulation low. Today the market is rallying on good news from China. GDP came in at 6.8% and IP/retail sales were okay. The trade numbers a week ago were also good and China's market should find support. Earnings season is upon us and the releases will crank up this week. The best companies post early in the cycle and optimism will build. I like buying FANG stocks ahead of earnings. These companies don't do much business in China and they led the rally in 2015. Every early rally this year has been sold. Stocks probe for support and they rarely find it. The rally this morning will be tested as well. One of these days, the selling pressure will be brief and we will see an instant reversal. The SPY will rally above the first hour high and it will continue to grind higher the rest of the day. The market will close on its high of the day and we will see follow-through buying the next day. This is the pattern you want to see. Could today be that day? I believe all of the elements are in place for a nice bounce. Sentiment is extremely bearish and shorts will run for cover. I have been day trading from the long side and making money every day. Strong stocks stick out like a sore thumb. I will use the same strategy today. There is one pattern I trade and it is extremely powerful. If you want to see it, take my one-week trial and witness the success in my chat room. This earnings rally should push us above SPY $200. As we get closer to the 100-day moving average, I will get bearish. Wait for the pattern I described and then get long. You can hold long positions overnight for a few days, but take profits along the way. I believe the table is set for a nice rally this week. . . image

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