© Copyright 2022 eOption, a division of Regal Securities, Inc., Member
FINRA/
SIPC |
Important Disclosures
950 Milwaukee Ave., Ste. 102 | Glenview, IL 60025
The information on this web site is for discussion and information purposes only. All accounts accepted at the discretion of eOption which accepts customer orders only on an unsolicited basis, and does not make any recommendations regarding any security or securities product with the possible exception of orders executed by our full service bond desk. Nothing contained herein should be considered as an offer to buy or sell any security or securities product. Online trading has inherent risks due to loss of online services or delays from system performance, risk parameters, market conditions, and erroneous or unavailable market data.
FINRA BrokerCheck reports for Regal Securities and its investment professionals are available at www.finra.org/brokercheck.
Options Disclosure: Options involve risk and are not suitable for all investors. Prior to trading options, you must be approved for options trading and read the Characteristics and Risks of Standardized Options. A copy may also be requested via email at support@eoption.com or via mail to eOption, 950 Milwaukee Ave., Ste. 102, Glenview, IL 60025. Online trading has inherent risks due to loss of online services or delays from system performance, risk parameters, market conditions, and erroneous or unavailable market data.
eOption Commissions: Broker-assisted orders are an additional $6. Option strategies involve multiple purchases; therefore your transaction costs may be significant for option strategy trades. A commission rate of $2.00 for equities and $3.99 + $.10/contract for options, per execution, applies to orders entered and filled by eOption's Auto Trade Desk and does not apply to customers who enter their trades directly into the eOption platform and are not utilizing the Auto Trade desk.
Broker Comparison: The competitor rates from published websites were verified on 3/1/2022 and are believed to be accurate, but not guaranteed. Commissions are subject to change without notice. At some firms, commissions may not reflect broker-assisted fees, orders over 1,000 shares, penny stock trades, OTCBB, pink sheet stocks or foreign stock orders. Firms may offer reduced commissions if additional criteria are met.
Blog & Commentary: eOption is neither affiliated with, sponsored by, nor endorses commentary and the opinions expressed are solely their own. Content is provided for educational and informational purposes only and eOption cannot attest to its accuracy or completeness. No information provided has been endorsed by eOption.com and does not constitute a recommendation by eOption to buy or sell a particular investment. You are solely responsible for your own investment decisions, and eOption makes no investment recommendations and does not provide financial, tax or legal advice.
Jobs Report Was the Last Piece of Big News For the Next Few Weeks – Stimulus Bill Priced In
www.1option.com
The S&P 500 is only 50 points from its all-time high and a strong jobs number this morning will keep buyers engaged. Earnings season has climaxed and 80% of the S&P 500 companies have reported. Politicians are still haggling over the stimulus plan and a $1.5 trillion deal is priced in. We are heading into a news vacuum that will last three weeks and the action will slow down.
This morning we learned that 1.76 million new jobs were added in July. That is within the range of consensus estimates (1.5 million to 2 million). Weekly initial jobless claims have been trending higher at a four-week average pace of over 1 million and I am tracking that employment data.
There was encouraging news out of China overnight. Exports increased 7.2% (-.2% expected) and that was largely due to medical supplies. Imports decreased by 1.4% (1% increase expected) and that could be a sign that future demand is soft.
Tensions between the US and China are escalating and President Trump is threatening to use his executive power to ban TikTok and other Chinese apps. The US forced China to close its consulate in Houston and they retaliated by forcing the US to close one of its consulate’s in China. The US also removed favorable trade status for Hong Kong when China tightened its grip on the region. A year ago this rhetoric would have had a market impact, but investors have grown numb to it.
Earnings season is winding down. On average revenues are down 11.5% and profits are down 33%. Investors expect a robust recovery in Q3 and I feel there is room for disappointment.
The economic news will subside dramatically the next three weeks and traders will desperately look for “drivers”.
Politicians will wait until the final minute to reach a stimulus agreement. Once they sign the bill they will flee DC for a three week recess.
This happens every year and the trading volume drops off substantially.
Longer-term swing traders who can’t watch the market intraday should be in cash. The goal was to gradually get there before mega cap tech earnings a week ago and we have missed some upside since then. I consider this a low probability trading environment and the market will do well to tread water the rest of the month. August is seasonally weak and we could see profit-taking. I believe that the next few weeks will give us clarity. We will be able to gauge the spread of the Coronavirus and we will be able to monitor initial jobless claims.
Traders who are able to watch the market intraday can trade the last leg of this rally. The all-time high on the S&P 500 will act as a magnet and a quiet news cycle favors the current momentum. Know that conditions can change very quickly. Bullish sentiment is extremely high and the recent price action feels like a buying climax. The S&P 500 is down 13 points before the open and gaps down have been good for day trading. Use Option Stalker searches to find heavy volume and relative strength. Wait for market support and by the stocks. During the next few weeks I will be watching for signs of market exhaustion. Late day selling with follow-through the next day would be the first warning sign.
Get ready for some quiet trading the next few weeks.
Content is provided by OneOption, LLC, which has no affiliation with Regal Securities, Inc. (“Regal”) This commentary is provided for information purposes only, and is not a recommendation, offer or solicitation by Regal to buy or sell securities or to adopt any investment strategy. Regal has not participated in the creation of the OneOption content and does not directly or indirectly endorse the content. Any reliance on this material is at the sole discretion of the reader.