MomentumOptionsTrading.com Midday Update for 5/23/14
Bulls Nearing Breakout
The market learned after Thursday’s close Russian President, Vladimir Putin, would be speaking ahead of Wall Street’s open and before a 3-day holiday weekend. Overnight futures were up and remained in positive territory ahead of the open after he said he would respect the outcome from the presidential elections this weekend in Ukraine and will work with whomever is elected.
There are concerns this weekend’s election could ignite another round of violence. Putin added that he hopes all military action would cease following the elections but I find it hard to trust anything he says.
This week was fairly volatile considering the tight ranges that have held in May and next week could be more of the same. The bulls are close to a breakout following a continued rebound off Tuesday’s lows and a close above resistance could lead to another push at all-time highs.
If the bears hold current levels, they will need to strike hard on Tuesday to keep the indexes inside of their trading ranges. Tuesday’ have been bullish for much of the year but have shown weakness in recent weeks.
It has been a successful week for the portfolio with 3 more closed winning trades and there was a phenomenal comeback on 2 others. The portfolio has been on a nice run since late March as 13 of the last 16 trades have been closed for winners. I have recommended a mixture of calls and puts to play the bounces in between the trading ranges and hopefully soon, the market is setting up for a possible huge move over the next 1-3 months. This is when trading becomes much more easier.
My fluff targets from early March of Dow 16,800-17,000; S&P 1,909; Nasdaq 4,400; and Russell 1,200-1,225 have and may not trigger again next week. I have been bullish for well over 2 years on the market but these are the levels I have suggested and warned about a possible market top. However, I have also said Dow 19,000 is a possibility if the uptrend holds throughout the year and Dow 13,000 is a possibility if it doesn’t.
Studying the market and chart work are so important and why I love doing it each and every week. The research also keeps me one to two steps ahead of the suit-and-ties as most of them fail to do the homework.
Heading into the second half of trading, the Dow is up 59 points to 16,602 while the S&P 500 is gaining 7 points to 1,899. The Nasdaq is advancing 19 points to 4,173 and the Russell 2000 is higher by 8 points to 1,122.
The bulls will be trying to clear Dow 16,600; S&P 1,900; Nasdaq 4,175; and Russell 1,125 into the close. If successful, there should be a continued run higher into next week. If the bears hold these levels, they still have a chance to do some damage.
There are some last minute updates for our current trades I want to talk about so let’s head to the Members Area. I will be back Monday night with the Weekly Wrap and on Tuesday morning with the Daily. Until then, have a great weekend everyone!