Hello Traders and Investors,
The markets are “cooling off” as we head into options expiration tomorrow. After 9 months of consistent gains, I warned about increasing volatility (bear markets) heading into options expiration – will we finish the week down? It has been rare as options expiration week typically trades in the direction of the trend and the trend as we all know (whether we like it or not) has been up.
Now if we could see 20 inches on the ground of light, fluffy snow, we would be in business!!
Economic data has been flat (see initial claims) and Philly Fed and some data has been weak – see housing data. After 8 of 9 higher closes in $SPX, maybe an oversold level going into the weekend and next week’s Holiday is enough for bears to be in control for a little. BUT, as I have written, the trend is still UP until we have a failure in sequence.
The dollar is a little stronger (holding the lows and making higher lows or double tops/bottoms against most crosses – see USD/CAD, EUR/USD, NZD, USD
I would have to be bearish to neutral if I were carrying trades overnight and into the holiday week with stops at old highs in the $SPX
Happy Trading and Be Environmentally Cool
