Stock Market Analysis

Friday, July 28, 2017

Market Teethering On a Correction?

Market closed mixed yesterday with the Dow posting a surprise gain of +85 points or 0.39% while the Nasdaq retreated by 40% or 0.63% and S&P500 marginally lower by 2 points or 0.1%. This was what I meant when I told paid subscribers yesterday that:

"Even though the market still look very bullish, there is a secret undercurrent of bearishness brewing as investors return to the safety of bonds and take advantage of  the high bond yields even in a bullish day like yesterday. This tells me that investors are moving out of the market while the herd is probably moving in at this point. As such, I would start to be very careful around this area"

(Yes, I only publicly post my report every other day at best but paid subscribers get my reports DAILY for FREE... sign up now! It takes only one winning trade to make that back and MORE, you know it!)

Today, options traders also turned more cautious, bringing total equities put call ratio back to par. All in all, the market is looking very short term uncertain at this point due to the recent sharp run up and the market is set to fulfill the prediction I made on Monday morning that the market this week is going to end up sideways or slightly negative, proving once again the predictability of the market.

The earnings season could also have contributed to this uncertainty and volatility as investors take short term profit on earnings releases. If you are think of taking advantage of these earnings through the use of an Earnings Straddle, please read my latest free tutorial on The Problem With Earnings Straddle first before attempting to do so.

Another thing I told paid subscribers yesterday was the the market might even go into an intermediate correction at this point, the kind we saw back in March due to the run up over the past few months. However, that is still just a possibility and I am closely monitoring how high the chance of that happening is. 

In anticipation of such volatility, me and my Master's Stock Options Picks Subscribers have also taken profit on our call options position in QQQ, making a decent 35.5% profit / about $1500 on 5 contracts. Take a look at the trade here

For now, the market remains in all out bull trend.

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