Analysis for Short Term Option Trading!
Trade Recommendations- we continue to take a long term bullish view of the market but offer caution as this quarter may bring a pullback in the markets.
Bollinger Bands- the SPY has bounced off the middle band and now we are using that for the lower standard of movement. Look for the stock to possibly push up through 143 before it lowers back down for a rest.
RSI- the SPY has a slight (very short term) negative divergence but that just means the upward movement is not as strong. Still—it is strong enough to continue its move up. Still healthy at 67. We expect it to continue to move up.
MACD- the MACD compliments the RSI’s version of a slight divergence. We see this is the MACD Histogram though. Be aware of the movement not being as strong as in the past weeks.Just be aware.
Outside Market Influences-
European stock markets gave up some of their previous session's gains on Tuesday as the enthusiasm generated by upbeat U.S. economic figures had run its course.
A positive U.S. manufacturing survey from the Institute for Supply Management had helped stocks recover as Wall Street opened on Monday, pushing the Dow Jones industrial average, for example, up to its highest close since December 2007.
The buying momentum carried through into the Asian session but came to a halt as Europe's bourses opened.
Stock index futures fell on Tuesday after the S&P 500 climbed to a 4-year high in the previous session as investors awaited factory orders data and minutes of the latestFederal Reserve meeting.
Stocks started the second quarter strong on Monday, with the S&P 500 marking its highest close since mid-May 2008. The Dow scored its highest finish since December 31, 2007, while theNasdaq once again finished at levels not seen since late 2000.
Oil prices fell to near $104 a barrel Tuesday as traders eyed mixed signs about the strength of the global economy. Crude has traded near $105 a barrel since February as traders weigh an improving U.S. economy against signs of weakening growth in Europe and China.