Analysis for Short Term option trading!
Trade Recommendations- we are bearish now as we want to see the SPY define where it will build support. .
Bollinger Bands—the SPY has moved up but it does not look like it will even make it to the middle Bollinger band yet. If this is the case we may see the beginning of a strong bearish move the first of December..
RSI- the SPY still has the bottom at about 37 but we do not seeing it get above ‘50’ today and that is what we were looking for. This may support the strong bearish move that we possibly see developing in the Bollinger bands.
OBV- the SPY has a base that we are watching and want to work off of now as our point of reference. Staying above this point will help us gear the strength of the next move we are observing.
Outside Market Influences-
EU finance ministers meeting last night were told Italy is at risk of insolvency. Ouch that hurts!
With Italy facing bankruptcy, the EU's finance ministers yesterday came to a late-night agreement on two possibilities to expand the EFSF bailout fund: a 20%-30% risk protection for bondholders, and the creation of "co-investment funds" to combine public-private financing for bond purchases. However, ministers couldn't say by how much they would leverage the EFSF because of deteriorating market conditions.
S&P yesterday lowered the rating on 37 of the largest financial institutions in the world, including almost all major U.S. banks, with Bank of America (BAC), Citigroup (C), Morgan Stanley (MS) and Goldman Sachs (GS) among those hit. The agency may have telegraphed the move as part of the application of its revised bank criteria. Oddly, several European banks were left unscathed - is there more to come?
Siemens (SI) and Diageo (DEO) are among the multinational companies that are preparing for a possible eurozone break-up. Their concerns include: banking system instability, currency devaluations that would make imported brands very expensive, and a cloudy legal future for existing cross-border loans and contracts.
Stock index futures rose on Wednesday after China unexpectedly cut its banks' reserve requirements in hopes of boosting an economy running at its weakest pace since 2009.