Market Treading Water – Look For Low Priced Stocks That Are Breaking Out

May 21, 2015
Author: Peter Stolcers, Founder of OneOption

I've been finding great stock trades like CMCM, OPK and MOMO and I will try to find one this morning. CLICK HERE TO TAKE THE FREE TRIAL. You will see trades it in the chat room and you will see the stocks I'm trading in Pete's List. Posted 9:30 AM ET - Monday, the market broke out to a new all-time high. Since then, it has been treading water. Trading volumes are extremely light and we are in a news vacuum. I don't believe we will see any major moves the rest of the month and that provides a nice setting for premium selling strategies. The FOMC minutes were released yesterday. The comments were generally "dovish", but there was not much of a market reaction. Flash PMI's were posted overnight. China was a little soft, Japan was good and Europe was mixed. The market is flat overnight and this news did not spark a move. Looking ahead, the news is also light next week. Memorial Day will shorten the week and trading volumes will remain low. The jobs report will be posted on June 5th. Earnings season is also winding down. Retailers have generally disappointed, but analysts are blaming bad weather. They are expecting pent-up demand in Q2. Retail stocks have been down, but the damage has been relatively contained. I started selling bullish put spreads a couple of weeks ago and those positions are in nice shape. If the SPY closes below $212, I will reduce risk by taking profits on some of those trades. If we get through next week without a decline, premium will be sucked out of the spreads and I will be able to close them down for a nice profit. I have been finding excellent stock trades early in the day. These have generated some healthy returns and they are featured in the chat room. If you've not taken the free trial, you should. You will have access to the chat room during the trial. You will see me find low-priced stocks that are breaking through horizontal resistance. These are a swing trades. I'm not trading options so I don't have to worry about time decay. These moves typically last a few days. Sell out of the money put premium and take advantage of this news vacuum. I've been adding positions for the last two weeks, so I already have a full boat. I am not adding bullish put spreads at this stage – it is late in the game. Look for stock swing trades and focus on breakouts. I will trade the first few hours of the day. Trading ranges will collapse and the action will grind to a halt. Janet Yellen will speak tomorrow. She has been "dovish" and her remarks should be market friendly. Stocks should tread water on low volume the rest of the week. image

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