We mentioned this would be a tricky week to trade the market with a midweek holiday and a rising VIX. We were on point in calling the Santa Claus rally and predicted the opening day fade yesterday while saying today could provide us some clues on where the market could be headed next week.
We talked about the 2% cushion the bulls had going into Thursday’s action and the 1% pullback. Futures were showing a weaker open after midnight but had reversed course ahead of Wall Street’s open this morning. We were hoping for a 0.5%-1% flush at the open and then a rebound that would have been the perfect setup for new trades.
After an opening pop past levels were are hoping to see hold into the close, the rebound has faded with Tech trading lower. The good news is the S&P Volatility Index ($VIX, 14.05, down 0.18) is trading lower and the small-caps are pushing higher ground.
This type of action is usually an indication a trading range could continue. Trading ranges can last for days, weeks or months but we don’t believe the market will stay in this one for long.
With the CES Conference next week and 4Q earnings season coming up the week after next, the odds of a breakout to new highs – or a test to support – are good. The CES show is a major consumer Electronics and Technology gathering that will provide some very interesting tidbits and information on Tech for the year with a number of CEO’s scheduled to speak.
As we make the turn into the final half of trading, the Dow is up a 12-pack to 16,453 while the S&P 500 is lower by a point to 1,831. The Nasdaq is lower by 15 points to 4,128 and the Russell 2000 is gaining 2 points to 1,152.
We have 2 New Trades we are getting into as our portfolio is very light. We are wrapping up a few more trades from November and December that have been monster winners and we are in PERFECT shape to play the market’s next major move. With January options expiring in 2 weeks, we are starting our next “batch” of trades with February and March options.
We will back Sunday night with the Weekly Wrap and on Monday morning with the Daily. We are also putting the finishing touches on our 2014 edition of our option trading course, How to Trade Options on Momentum Stocks, and our hopes are for them to start shipping soon. In the meantime, we will be doing a video this weekend to help you get ready for earnings season so for those of you that have upgraded to our 1-year membership, look for it by Sunday night as well.
Until then, have a great weekend everyone!
(Special Note: For our Weekly Wrap subscribers, we may have a Profit Alert ahead of the close as one of our trades is showing strong gains.)
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