July 21, 2017

Is This the Beginning?

A Few Random Thoughts

I can’t remember how many times I have seen 300 point opens in the Dow futures.

The rally today was strong. The talking heads will attribute the advance to Europe or a piece of economic data, but in reality the pop came on the heels of one of  the lowest short-term oversold readings in years. As a result, the probability of a short-term advance was extremely high.

Last week the market lost over 4% in just over 3 1/2 days on extremely low volume. The entire move displayed very little conviction.

Bullish? Yes, I think this move could extend itself for several weeks as Santa Claus and his typical holiday rally looks imminent. Add the fact, that seasonally we are entering one of the strongest periods of the year and I think we could see a decent short-term rally that could last into the first few days of December. There are a few large gaps on the upside in most of the major indices so I think the market is more prone to take  out the gaps before we possibly see more weakness.

One thing is certain, the next few days should be quite revealing, but moreover, fun. Yes, fun. It is not often that I am bullish, so it is kind of nice to actually have some short-term conviction to the upside.

I will be back later this weekend with more options related info. Stay tuned!

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