Market Needs A Driver – Look For Dull Trading Next Week. Cash Is King

Posted 9:30 AM ET (Market Open) - Yesterday, the market staged a beautiful rally. Stocks moved higher in a nice orderly fashion and the SPY challenged the all-time high. It looked like we might actually breakout. Unfortunately, once the momentum stalled stocks reversed and the market closed in the red. This is a very low probability trading environment. The price movement is random and it does not make sense to take overnight positions. Option implied volatilities are near historic lows and premium sellers are not being properly rewarded. The economic releases next week are light. China will post retail sales and industrial production. These numbers could be soft. Earnings season is winding down. Retailers could weigh on the market as they post results. The market lacks a driver and traders will keep their size small until we have a breakout/breakdown. "Cash is King." I am not carrying any overnight positions, but I am day trading. I still feel the next big move will be down. I will buy June put options at SPY $186, $184.50 and $183. Look for choppy trading today. . .

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