Pete Stolcers | OneOption @1OptionsTrading

Reduce Your Trading Activity - One of the keys to predicting price movement is urgency. When buyers or sellers are motivated, our odds of predicting future price movement rise. When they are not motivated, the price action is choppy and the activity is highly influenced by trading programs. This is why we avoid trading stocks with mixed overlapping candles. Neither side has control and predicting future price movement is like trying to predict the flight of a bat. We want stacked consecutive green candles on heavy volume. That is a sign that long term buyers are aggressive. There are a handful of periods each year that last a few weeks. The price action is strong and our odds are high. That is when we trade actively and that is when we "make bank". The rest of the time we are waiting for those moments to set up. This is a time to be patient.

How To Day Trade This Market - Bearish Pick. Keep your trade duration very short term and reduce size. This is a low probability environment and I explain why in this video. I did include a good short to consider. youtu.be/TAwkzbnRoYg?si… via @YouTube

Last week the price action for the market was very soft and good earnings and a positive reaction to MU did not excite buyers. The SPY has lingered around the 50-day MA and it closed below it. This is not a reason to take short positions, but is is a reason to reduce long exposure. I am going to stick with shorter term trades into earnings season which starts in two weeks. The issue right now is that neither side is acting with any sense of urgency. Buyers and sellers have been able to push price and this is a low probability environment. Asia was up 1% overnight and Europe was down slightly. The economic news during this holiday shortened week will be heavy Tues - Thurs. ISM manufacturing, official PMIs and all of the jobs data will be released. I am expecting good results. When we get back from holiday, earnings will kick off a week later. I would not give Iran a second thought. It stopped mattering two months ago. From a swing standpoint, you will have a nice opportunity to take gains on long positions today. If the market closes above $739.40 you might even consider holding the remaining positions. We need to get above that level quickly and then follow through. July is typically a good month for the market and the bid is usually strong into earnings. $722.60 is a support level to watch and if the market closes below that it would be bearish. Given the nice bounce this morning, the holiday and earnings season coming up, that threat is minimal this week. From a day trading standpoint I would not rush in to buy this gap up. There is no news to justify the move. We have see higher opens and lower closes. I am expecting a nice attempt to move higher that loses its steam by late morning. The levels above are support and resistance. When we move through them we want to blow through them quickly on nice steady volume and we want to see follow through. That is a sign of interest and that would give us confidence to take trades.

MAJOR SHIFT IN MARKET BIAS - The selling pressure in the US has been steady for the last two weeks. If buyers were excited we would not have tested the 50-day MA a second or third time and now the SPY has closed below it. Yesterday the back drop was perfect for a short squeeze. The market had tested the 50-day MA a second time and the expectations for a negative reaction to MU earnings was priced in. The stock rallied to a new high and tech stocks bounced. In the last few months, that would have sparked buying. Support would have been confirmed and we would have seen a nice bounce. That's not what happened. The opening gap higher was smacked down like Chris Rock at the Oscars. Overnight China was down 2% and the FXI made a new 52-week low yesterday. Japan was down 4% overnight. Korea had a 10% drop two days ago and it is down 5% overnight and poised to test that low. European markets were down 1% on average. This is a global market decline and it has spread to the US. My market bias has shifted to neutral and it won't take much to shift me to bearish. We have a lower high double top. I expected a decent bid as we head into earnings season and that natural buying has not been enough to support the market. Gold and crypto have been crushed and software stocks (10% of the S&P 500) have been very weak. I am not entering any new bullish put spreads. I will manage what I have on. My bullish put spreads expire in three weeks or less and I won't hesitate to take gains if the market starts to drift lower today. This is a critical juncture for the market. Be defensive. We have new information and we have to adjust to changing conditions. Until we have that information, we have to run with the information we have. We are data analysts. If you have recently entered bullish put spreads, I would buy them back. The reward is now smaller than the risk. I am not in panic mode, I am just adjusting. Software stocks have been great shorts along with crypto. Support is $722.60 and resistance is the 50-day MA.

Shorts Have Been Punished... Again. This morning we are seeing a nice bounce off of the 50-day MA. My put spreads will get some welcome relief and those positions will be much easier to manage. Only a massive market decline would have put me in harm's way and I was betting against that outcome. I did not have the technical evidence that supported a breach of this moving average. I would not buy this gap, wait for confirmation. We need to get through the high from Wednesday with ease, then we can buy. I have been persistently selling bullish put spreads for months and the selling pressure I saw the last few weeks has me cautious into August. Earnings season will keep a bid to the market through July, but I will not be selling puts that are more than a few weeks out and I will be going to a "hit and run" strategy.

How To Make Money Trading This Market. We don't always have to know what the market is going to do, sometimes knowing what it is NOT going to do is enough. I show you how this works in today's video. youtu.be/92E9I1YHt5I?si… via @YouTube

This Is Not the Price Action I Want - Buyers needed to show more conviction and a close below the 50-day MA would put me into neutral mode.

The Key To Trading This Week - The market is back above the EMA 8 and it has recovered half of the long red candle from last Wednesday. Buyers need to demonstrate interest at this level and a rally above SPY $752 would pave the way for a test of the all-time high. I am not expecting an explosive move higher, just a gradual light volume climb.

Triple Witching Caused the Drop - The last two days the market was in a gradual drift lower. Large institutions roll positions during triple witching and when the momentum is steady in one direction they "goose" the move by legging out of positions. The move lower has been consistent since the high Monday and it accelerated into the close. This morning, those loses have largely been erased. I feel the drop had more to do with triple witching than the FOMC Statement. I am looking for a new all-time high in July.

Dead Till the Fed - The FOMC Statement is today. Warsh is not likely to make any big policy changes. No one is expecting a rate cut. Economic growth is solid and with oil prices coming down, inflation will stabilize. Triple witching is tomorrow and the trading week is compressed because of the holiday. Given the price action yesterday and the flat opening today, I am not expecting any big fireworks.

Price Compression Likely Today - The market is flat on the open and after a nice run, we should expect a pause today ahead of the Fed. Trim size and trade count. Don't be the fool who gets their ass kicked during what is likely to be a low probability trading day.

Supply of Stock Keeping a Lid on the Rally - The recent stock offerings and IPOs need to be absorbed. The appetite for these issues could be limited. I believe the market still has upside through July, but the gains will be hard fought... especially if there are more offerings.

Countdown To Lift-off - SpaceX IPO tomorrow. IPOs are casting a shadow over the market and the supply of stock is increasing. These are massive public offerings and they will keep a lid on the rally. Google did a capital raise for $85 billion last week and Oracle announced a $20 billion offering yesterday. SMCI said it will have to tap equity markets for $7 billion yesterday. This is not a healthy trend. I am still bullish, but less so. The market should be strong through July.

Retail Traders Excited By SpaceX IPO. Why Is the Market Is Down? youtu.be/LsjRjpfWoGc?si… via @YouTube

I'm Still Bullish - The market has some nervous jitters to work off, but each day the odds of a bounce increase. The first hurdle is to close above the high from Monday. That is the midpoint of the long red candle from Friday. If it can do that, the market will rally above the EMA 8.

Odds of a bearish trend day in $SPY are high.

In my opinion it won't work. Too many people doing the same thing at the same time ruins the price. That is why large institutions have to scale in.

Pete Stolcers | OneOption @1OptionsTrading

a month ago

$HOOD is rolling out a feature that lets users delegate stock trades & Gold card spending tasks to AI agents within preset limits. What's your opinion on this?

2 0 9 2K 2

$HOOD is rolling out a feature that lets users delegate stock trades & Gold card spending tasks to AI agents within preset limits. What's your opinion on this?

If you were going to play the odds: - A wimpy drop during the day for the first move should set up a move at very least to the opening price and perhaps above it. - If the first move is up, that is more difficult to trade because you have to short a strong market.

Pete Stolcers | OneOption @1OptionsTrading

a month ago

This is a tough environment for day trading $SPY The closes are near the open and everything in between is chop.

1 0 12 2K 2

This is a tough environment for day trading $SPY The closes are near the open and everything in between is chop.