Market Will Rally Above the 100-Day MA and Hold Thru July Options Expiration

July 13, 2015
Author: Peter Stolcers, Founder of OneOption

PLEASE RATE MY MARKET FORECAST ON INVESTIMONIALS. My analysis has been spot on for many month and your reviews motivate me to keep this blog going. Posted 11:30 AM ET - The macro backdrop has improved since Friday and the SPY is challenging the 100-Day MA. This resistance level should hold for a few days, but earnings season should push us through later in the week. I am not looking for an explosive breakout, but we should be able to challenge the highs in July. China's market has stabilized. The trade numbers showed improvement and GDP, retail sales and industrial production will be posted Wednesday morning. Chinese stocks are trying to bounce, but we are likely to see additional selling pressure. For the time being, support will hold. Greece signed a bailout agreement and there will be tax hikes, pension reform and pledged assets. They caved in to avoid default and we could see riots. The market reaction has been fairly muted and this saga will continue. Traders were expecting a deal and the event was priced in Friday. Earnings season will crank up this week. Banks will post decent earnings and we are likely to see strength in the financial sector ahead of a likely rate hike in September. The FOMC will meet on July 28th. That will be their last meeting until September. Interest rate worries will not flare-up ahead of the July meeting and we should have positive price action for a couple of weeks. I have been selling out of the money bullish put spreads. This is still the preferred strategy. I have also been buying a few calls on breakouts. Once we get above the 100-day moving average, it should hold through July option expiration. I told you to get long last week and I hope you took my advice. You should have most of your position on and now you just have to manage profits. I am not chasing this market – I am already long. I will day trade stocks that are breaking out. Let this rally run and start scaling out of bullish positions when the momentum stalls. . . image

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