Bullish Specs Were Flushed Out – Buyers Stepped In – Nothing But Noise

CLICK HERE TO TAKE THE FREE TRIAL. You will see today's trade it in the chat room and you will see the stocks in Pete's List. Posted 9:25 AM ET - This market volatility is fairly normal when the news and trading volumes are light. The decline Tuesday flushed out bullish speculators and buyers returned yesterday. The SPY is back above the breakout at $212. China's market was down more than 5% overnight. I believe this move was sparked by an increase in margin requirements. They had a similar move a few weeks ago and I believe this is a temporary dip. China's market is barely down for the week and it is up 4% for the month even after the overnight decline. GDP will be released tomorrow and it should be a little light. I am not expecting much of a reaction. Major news releases are scheduled next week and traders are not likely to take large positions ahead of the numbers (ISM manufacturing, ISM services, ADP, ECB rate decision and the Unemployment Report). Rumor has it that Greece is close to a deal. This never ending saga will continue until they get booted out of the EU. They have a major round of financing to get through and if something major is going to happen, it is likely to come to a head in the next few weeks. My bullish put spreads are in great shape and I have lots of breathing room. I am ready to buy them back at any time, but the longer I wait, the more money I will make. Time decay is working in my favor. Yesterday, I added some great-looking stocks to Pete's List. I found a lot of breakouts on heavy volume and these stocks are poised to run. I will buy a few calls, but I'm not going overboard. If the market declines, these stocks have strong bids and I should be able to exit unscathed. If you want to see these picks, take the Free Trial. I don't believe the decline in China will have a lasting impact. However, there is nothing else to trade off of and it might trigger a little selling. Let's see if the breakout can hold. If the market is above SPY $212 after two hours of trading we will tread water the rest of the week. I believe the next decent move will come next Wednesday. Get ready for a quiet stretch. Keep your size small. . .

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