Market Commentary

SPY
10 Min Chart

6 Month Chart

87.5 looks to be the next major test for this amazing bear market rally. Until I see a large gap down with follow through action on the downside, I see no reason to bet against this rally. So far, any attempts to fade this recent action would have likely resulted in losses unless it was a daytrade.

QQQQ
10 Min Chart

7 Month Chart

The Q's are continuing to show relative strength in the intermediate term time frame. The red and green lines represent the short term points of resistance and support to look for in the coming days and weeks. I am looking for a break from the narrowing channel denoted by the orange lines. A break of a trend line does not necessarily mean momentum has been completely reversed. It just means that the rate of movement has changed in some way.

Earnings this week should make for further volatility and potential opportunity.
Tuesday: CSX, GS, INTC, and JNJ
Thursday: JPM, ISRG, NOK
Friday: C, GE

The financials have been on a tear. While it is fairly easy to say that the sector along with the general indexes have gone too high, too quickly, do not step in front of a runaway train unless you are prepared to have your family cash in on your insurance policy.



Options expire this Friday. I will be looking at potentially enacting a straddle position on the likes of ISRG, JPM or GS. The premium is still at 4% for an at the money call for GS so a straddle remains quite expensive. However, if you believe GS, ISRG, JPM, or another equity has the potential to move drastically, then a straddle may be a way to manage risk while playing these volatile stocks.