Analysis for Short Term option trading!
Trade Recommendations- we are bullish but with the holiday season, we are bullish at a snails pace. Nothing is happening.
Bollinger Bands— as predicted, the SPY has made an about face as it neared the top of the
Bollinger Bands. It has contracted greatly since the holiday season. This means our volatility is much lower. If we continue in the same pattern, look for a move down around 121 before it rebounds. (if it does at all)
RSI- it is interesting how we see the SPY contracting and the RSI gets closer and closer to hovering just around that ‘0’ marker. You can see how it has been flipping up and down between the lines. This is a typical consolidating phase.
OBV- unlike the RSI, the OBV shows the SPY with a bit more of a bullish lean. It seems to hint that the SPY will end up bullish when it does break out in January some time.
Outside Market Influences-
Italy sold €2.5B of 10-year bonds at an average yield of 6.979%, down from recent highs but still an unsustainable level. The 10-year auction was slightly oversubscribed, with a bid-to-cover ratio of 1.357%. All told, Italy raised ~€7B today from bonds of varying maturities; the plan was to sell €5B-8.5B.
Analysts see oil prices staying above $100 a barrel in 2012, with the potential for an Iran disruption embedding a $10-$20 premium in prices. Also seen as contributing to the forecast for $100+ prices is the concerted effort of OPEC nations to keep prices elevated to help fund social assistance programs promised by governments in the Middle East and North Africa in response to the Arab Spring uprisings.
Wall Street is pointing higher before the bell, with investors awaiting the latest data on jobs and home sales.
The Labor Department releases weekly unemployment claims at 8:30 a.m. Eastern time Thursday. While economists expect a modest uptick, applications in the previous report fell to the lowest level since April, and a modest increase likely won't dampen that trend.
Also, the National Association of Realtors reports on the number of contracts for new homes signed in November. October contracts were at the highest level in a year, albeit a terrible one. And a report Tuesday showed that prices for homes fell in most major cities.
Italy's borrowing costs fell for a second day Thursday but the country's new premier said his government has more to do before it convinces financial markets it can manage the heavy debts that have made it the focus of the eurozone crisis.