Daily Commentary: July 01, 2021

Jeremy Engelbrecht1Option Commentary

No Market Fireworks – Watch For Dull Trading – Happy 4th of July

Posted by Pete Stolcers on July 01

The economic numbers this week are not having much of a market impact. ADP was inline yesterday and initial jobless claims this morning were as well. ISM manufacturing will be posted after the open today and the jobs number will be posted Friday. We are in pre-holiday mode and the volume is light.

The hourly wage component of the jobs report is something I will be watching tomorrow. Anything north of .7% would put upward pressure on interest rates and it could spark some profit taking. As long as wage inflation is benign the market will drift higher.

Longer term swing traders took a half position in the SPY Tuesday morning on the open. I am more bullish now than I was a few weeks ago. Bonds have rallied, Chinese stocks are finding support and companies almost have another quarter of profits under their belt. In two weeks the bid will strengthen as earnings season approaches. I am not taking a full SPY position because the volume is light. Short term swing traders (1-3 day holding period) can take some overnights. PopBull is my favorite Option Stalker search for short term swing trades.

Day traders should look for the hot groups/sectors. Look for heavy volume, technical breakouts and relative strength. Heavy Volume, Bull Run and Red Hot are my favorite Option Stalker searches.

Support is at SPY $426 and resistance is at the all-time high. I am favoring the long side, but I still consider this to be a low probability trading environment. Tiny bodied candles on the daily chart are a sign of resistance at the all-time high and light volume indicates a lack of conviction on the part of buyers. This rally is more of a sellers boycott than a vote of confidence.

I will not be posting comments Friday and I hope you enjoy celebrating the birth or our great nation.


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