© 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.
The Market Is Trying To Establish Support – Here’s the FOMC Reaction I’m Expecting
www.1option.com
The market is trying to establish support after a pullback during the last two weeks. Dovish Fed comments are expected today and House Democrats will not take recess in October unless a stimulus bill has been passed. The market bid is firm, but profit takers will keep a lid on the rally if prices get overextended. Valuations are stretched and there is room for disappointment. In short, buyers and sellers are paired off.
The Fed will keep interest rates low even if inflation rises above the 2% target. This is extremely dovish and officials have implied that they have done all they can to stimulate economic growth and that now it is time for politicians to take action (fiscal stimulus).
The fact that politicians are committed to forging a stimulus bill is encouraging, but this might be lip service ahead of the election.
Economic data points have been good. Retail sales increased .6% and that is slightly below the 1% estimate.
Based on option open interest day-to-day there does not seem to be a large influence one way or the other as we head into quadruple witching. On an end-of quarter basis fund rebalancing should also have a negligible impact. Most funds adjust on a month-to-month basis and they will be buyers. Funds that adjust quarterly will be sellers and there will be zero net effect.
From a technical standpoint the market should try to rally off of support. If this bounce lasts a couple of weeks it will confirm support and this price action would be bullish. If the market is not able to advance and SPY $332 is tested in the next week, we are likely to see additional selling pressure and the market will stage its next leg lower.
Swing traders should be in cash. I will be watching the price action this week and I might sell a few very short-term out of the money bullish but spreads. Buyers and sellers seem to be paired off and the market could be range bound until the election. When I can’t get a good read on market direction, I keep my swing trading risk low.
Day traders will have opportunities on both sides. The early action this morning will provide a few trading opportunities, but the movement will stall into the FOMC statement this afternoon. The reaction should be muted. The early gaps higher have gained traction and then profit-taking sets in. I don’t know if this pattern will prevail today, but I will be watching for. We will use the 1OP indicator for market direction and we will trade stocks with relative strength/weakness based on those signals. This is our daily routine in the chat room and I’m expecting sideways action.
Support is at SPY $337.50 and resistance is at $342.50. I expect that range to hold today.
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.