Analysis for Short Term Option Trading!
Technically Speaking-
Trade Recommendations- we continue to be bullish, with the economic news in China of a slow down, we would be cautiously bullish short term but still see long term bullish signals.
Bollinger Bands- the SPY is moving back inside the bands now so we will wait for another push out before we see signs of moving down. It is still very bullish in our minds.
RSI- the RSI is over continues to hover with that over bought level. The thing about it is we really do not have any serious movement either way. This is how the SPY has been moving for the last 6 weeks. Just 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
A run of poor economic figures weighed on markets Thursday in what is turning out to be one of the worst weeks for stocks this year. Disappointing figures out of China and the 17-country eurozone have prompted investors to cash out of stocks, following a strong run in previous weeks. Many traders are wary of further pushing up indexes, many of which recently hit multi-month highs.
The catalyst to Thursday's retreat was a Chinese manufacturing index compiled by HSBC. Its main index fell to 48.1 in March from 49.6 in February. Figures below 50 indicate that manufacturing is contracting. Earlier this week, soft Chinese housing data and a warning from miner BHP Billiton have stoked concerns about the outlook in the world's second-largest economy, which has shored up the global economy over the past few years.
US Markets
Wealthy taxpayers would see a big jump in their tax bills under President Obama's latest budget proposal, according to a new independent analysis. In fact, those in the top 1% of income would see an average tax increase of nearly $109,000 in 2015, according to the Tax Policy Center.
Applications for weekly unemployment aid likely remained last week near the four-year of 351,000, reached two weeks ago. The Labor Department releases its latest report on unemployment benefits at 8:30 a.m. Eastern time Thursday.
Applications have fallen steadily since last fall, and are down 14 percent since October. The four-week average, which smooths fluctuations, is also at a four-year low. When unemployment benefit applications drop consistently below 375,000, it usually signals that hiring is strong enough to lower the unemployment rate.
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