Analysis for Short Term Option Trading!
Outside Market Influences-
With the drop the last couple days, the SPY has slipped into the low 50’s. It will be interesting to see if it drops past the ‘50’ level. This will signify more weakness than in the last dip it had. It appears that slight negative divergence did warn us of a move down.
This dip has dropped us below the middle Bollinger Band already. Will the SPY touch the bottom band? This is what we are waiting to look for.
As with the RSI, the MACD Histogram has confirmed that the negative divergence is the short term warning we have been looking for. Observing the length of the dip will be our next project.
Greece on Thursday extended to April 20 the deadline for a last batch of private investors who own some €8 billion ($10.5 billion) worth of its bonds to voluntarily join a massive swap deal and accept a deep cut in the value of their holdings.
World stock markets fell Thursday after a weak Spanish bond auction inflamed concerns about the European debt crisis and hopes faded for more help for the U.S. economy from the Federal Reserve. Benchmark oil rose above $102 per barrel while the dollar rose against the euro but ebbed against the yen.
The debt crisis in Europe flared anew after a disappointing auction Wednesday of government debt in Spain signaled investor confidence in the country's finances is weakening. That compounded worries that arose Tuesday, when minutes released from the March meeting of the U.S. Federal Reserve's Open Market Committee gave no hint of a third round of bond purchases, dubbed quantitative easing III or QE3, to support the U.S. economy.
The impact of the downgrade has been limited, but a poor Spanish debt auction Wednesday renewed worries that European economies aren't growing fast enough to keep their deficits in check.
The number of people seeking U.S. unemployment benefits likely stayed near a four-year low last week, as layoffs slow and the job market strengthens. Economists forecast that weekly applications were essentially unchanged, at a seasonally adjusted 360,000, according to a survey by FactSet. That compares to 359,000 two weeks ago, the lowest number of applicants since April 2008.
The Labor Department will release the report at 8:30 a.m. Eastern time on Thursday. The four-week average, a less volatile measure, dipped to 365,000 two weeks ago, the lowest since May 2008. The average has fallen about 12 percent in the past six months.
Stock index futures fell on Thursday as a rise in Spanish bond yields renewed concerns about the euro zone's financial health, and as investors awaited a closely watched report on jobless claims.