Analysis for Short Term Option Trading!
Technically Speaking-
Trade Recommendations- we continue to be bullish, but are cautious as the market moves ever so slowly and Europe looms always!
Bollinger Bands- the SPY continues up but has pushed through the upper band last week. This usually signifies a pull-back coming soon. We are still bullish, but looks like early signs of a possible pull-back.
RSI- the RSI is over bought at this point. The second thing we have noticed on a longer level is the negative divergence. This is usually a sign of either a reversal or a pullback coming soon. A pull-back could be simple consolidation and not a real downturn. We still look bullish.
MACD- the SPY is still bullish here also, but we also can see this long term negative divergence in the MACD Histogram. This supports the RSI’s sign of a possible turn back. So it is something to be aware of in the near future.
Outside Market Influences-
World News
Eurocopter, the world's largest maker of helicopters for civilian use, plans to expand its production inGermany, German weekly magazine Wirtschafts Woche reported, citing Chief Executive Lutz Bertling.
"We are doing research for the next generation of especially environmentally friendly helicopters in Germany. And we are also talking to the governments of Bavaria and Germany about support for a new civil program," the magazine cited Bertling as saying in an interview, without providing further details.
US Markets
Investors are beginning to wonder if this Energizer Bunny of a rally can just keep going without taking a break or a fall. Every Friday for the past couple of months, the question has hung in the back of investors' minds: Is the stock market's rally strong enough to continue without a correction? Even with the S&P 500 above levels unseen since before the financial crisis, the answer remains: Yes.
The CBOE Volatility Index or VIX (MXP:VIX), Wall Street's fear gauge, plunged to a five-year low despite the S&P 500's stunning gain of 12 percent for the year so far. The VIX measures the expected volatility in the S&P 500 index over the next 30 days and generally moves in the opposite direction of the broad market. Investors often use VIX options and futures as a hedge against a market decline.
Consumer prices rose the most in 10 months in February as the cost of gasoline spiked, but there was little sign that underlying inflation pressures were building up. Surging gasoline prices put a small dent in consumer confidence early this month, other data showed on Friday. Still, Americans do not believe the sharp run-up in prices will last. The Labor Department said the Consumer Price Index rose 0.4 percent in February after advancing 0.2 percent in January. Gasoline accounted for more than 80 percent of the rise.
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