Barron’s Gives the OneOption System High Marks This Weekend – Electronic Investor

November 3, 2014
Author: Peter Stolcers, Founder of OneOption

10:00 AM ET - I am happy to report that Barron's gave our trading system high marks in their review this weekend. You can read about it in the Electronic Investor section. They evaluated the system during the biggest decline we have seen it 2 years. They won't tout performance, but I will. We caught the dip and the rebound. Barron's subscribers can CLICK HERE TO READ IT Last week the market surged higher and a surprise move by the Bank of Japan "goosed" global markets. The S&P 500 sits right at the all-time high. The price action today will be very telling. If we immediately grind higher, it will indicate that Asset Managers are under allocated and are aggressively buying stocks. This breakout will attract bullish speculators and we will continue to grind higher. If this scenario plays out, I will buy futures during the day and I will buy calls this afternoon if we close near the highs. I will keep a very tight stop at SPY $202. The more likely scenario is a small pullback this week that fills in the gap from Friday. This would be a sign that there is a little profit-taking. This dip would allow us to gauge the strength of the bid. Good news is priced in. Analysts are expecting a GOP victory on Tuesday. This will only yield a majority by one or two seats in the Senate and the gridlock will continue. Last week, the Fed cited strong employment and analysts are expecting 225,000 new jobs on Friday. Official PMI's in China and Europe were a little light, but nothing too concerning. China's growth is intact and we've had to deal with weakness in Europe for the last few years. The market can shoulder this news. The ECB will meet on Thursday and I'm not expecting any fireworks. They launched a QE program and bank stress tests are out-of-the-way. They will see if these developments calm nerves. Draghi has stated that the ECB has done all it can and that countries (Germany) need to initiate fiscal stimulus. Earnings season has been excellent. Over 75% of all companies have exceeded earnings estimates and profits are up 7.5% on average (the best in four years). Bond yields are at historic lows and stocks are attractive on a relative basis. Seasonal strength is also working in our favor. New Ebola cases are decreasing in Liberia and some of the quarantines are being left it. This was the wildcard and conditions seem to be improving. I don't see any dark clouds hanging over this market. I will be buying back some of my put credit spreads and the establishing them closer to the money. I want to get long, but I don't want to jump the gun at the all-time high. I need to see a breakout and it needs to hold. . . image

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