Buy Calls – 10 Reasons the Market Will Rally Into the FOMC Statement

Posted 9:35 AM ET - I told you yesterday that I thought we were close to a capitulation low and we got it. The market probed for support early and we reversed hard off of the lows. Stocks closed on the high of the day and we are seeing follow-through buying this morning. I am going to buy calls early and I plan to exit just before the FOMC. Here are 10 reasons that the market is likely to rally after the FOMC: 1. Credit concerns are overblown. Junk-bond funds have taken a hit, but financial institutions are strong and there will NOT be a crisis in 2015. 2. The Fed knows that global markets are nervous. They will soften the blow with dovish statements. 3. Commodity prices have tanked, but they are near major support. Energy stocks will no longer be a drag on the market. 4. Seasonal strength is very powerful and Asset Managers will buy so that we close the year on a positive note. 5. China's economic growth is slowing, but it is stable. Industrial production and retail sales were better-than-expected this week. 6. Bearish sentiment is extremely high and shorts are about to get squeezed. 7. Bond yields are at historic lows and stocks remain the best game in town. 8. Corporate buybacks are at record levels and there is always an underlying bid to the market. 9. Low energy prices are good for consumer spending. 10. A rate hike will be vote of confidence and traders will be happy to get the first move under their belt. I am not building a massive bullish position. I'm still keeping my size relatively small, but I have the capitulation low that I've been looking for. The probability of success today is high. I will be buying calls on strong stocks today and I plan to hold them overnight. I believe the SPY will close above the 200-day moving average today. If the price action remains strong, I will hold these call positions overnight and I will exit before the statement. I am still expecting a bullish reaction to the FOMC statement and the market will grind higher into year-end. There is no question that there are underlying concerns as we head into 2016. That is why I'm keeping my size relatively small. Today we have a nice trading opportunities and I'm going to capitalize on it. Buy calls early in the day on strong stocks and plan to hold overnight. Take the FREE 1 WEEK TRIAL and watch us make money in the chat room today. Trade well. . .

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