Stock Market Analysis

Monday, October 16, 2017

Looks Like No Breakout Yet...

Welcome to Week 3 October!

This is also options expiration week for plain vanilla options and my Ride the Flow system is looking to yet another profitable month coming up this Friday! Indeed, the Ride the Flow system is my proudest and yet least understood options trading methodology to profit from any market direction with 5 mins attention per WEEK.

I change my mind now about what I said late last week to be a possible early end to this profit taking phase in the US market. Even though the market did close positive last Friday, I am just not seeing the kind of strength and participation that should be typical of a truly bullish day. Bond yields were lower across the board even though total equities put call ratio dropped in favor of call options trading. Such a split in opinion tells me that the market might not be ready for a breakout yet and we should see the profit taking sideways, slightly bearish inclined market, go into this week.

However, I continue to not see any evidence that this could be anything more than what we saw back in June and August and therefore not a good time to be short as well. In fact, I think this is a perfect time to be looking for new longs in order to be prepositioned for the next leg up...

What? Leg UP?

Yes, Leg UP.

So far, I don't see anything in the economic data, bond yields or other major market cycle indicators to suggest that this rally is in danger. In fact, filtering out the noise from the news, Trump seems to be doing an excellent job building up business in US and therefore, as long as he doesn't get impeached, I don't see why this rally cannot go on for another 6 months.

For now, the US market remains in short term neutral trend within an intermediate and primary bull trend.


Post a Comment

<< Home