Daily Commentary: September 02, 2020

Jeremy Engelbrecht1Option Commentary

Market Rally Is Over-extended – Watch This Video – Technical Warning Signs

Posted by Pete Stolcers on September 02
www.1option.com
 

Posted 9:30 AM ET- The market rally is strong and a bullish climax setting up. I don’t see any news speed bumps, but the warning signs are obvious from a technical standpoint. Bullish speculators are likely to get flushed out by profit takers and traders will have an opportunity to sell short in the next two weeks. I’m not looking for a prolonged decline, but a swift and deep move is likely.

This morning ADP reported that 428,000 new jobs were created during the month of August in the private sector. That was much lower than the 1.17 million that was expected. Initial jobless claims have been averaging more than 1 million during the last month and that does not bode well for Friday’s jobs report.

The second wave of the Coronavirus impeded the economic recovery and without the next round of stimulus, small businesses will be forced to lay off workers.

ISM manufacturing was very strong at 56.0 yesterday and ISM services will be posted tomorrow. This is encouraging data since it is forward looking.

Swing traders with a one month horizon need to be sidelined. The warning signs are clear and I’m going to keep my comments brief because I recorded a video this morning. Please make sure to watch it.

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