Market Will Float Higher – Average Gain Is 1.6% In the Last Week of Trading

December 22, 2014
Author: Peter Stolcers, Founder of OneOption

This is a holiday shortened week and the news is light. Trading volumes will come to a crawl and there will be an upward bias. Money Managers are rewarded for performance and a year-end rally is good for everyone. Even a small bid can push stocks higher on light volume. Over the last 10 years, the average increase during the last week of trading is 1.6%. Stay long and stay small. Durable goods orders and GDP will be released this week. Both reports should be market friendly. Focus on stocks that are in an uptrend, held up well during the market decline, have consolidated in a tight trading range and are breaking through horizontal resistance. If option premiums are rich, sell at the money put spreads and use the breakout as you stop. If option premiums are cheap, buy in the money calls with a delta of .8 or higher. Both strategies will benefit from a gradual grind higher. The market is within striking distance of the all-time high and we will challenge it in 2014. There is nothing to stand in the way of this rally. Stay long and be small. My comments this week will be brief. Merry Christmas and Happy Hanukkah. . . image

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