Online Stock Trading | Options Expiration provides the volume as stocks SOAR!

Options Expiration provides the volume as stocks SOAR!


Filed Under Market Commentary |

Quote from finance.yahoo.com’s main page! ***From the AP***

“Dow Hits New Record High
AP - Stocks surged higher Friday as another round of corporate takeovers prodded investors to continue a largely uninterrupted months-long buying streak. The Dow Jones industrial average registered its 24th record close this year and the Standard & Poor’s 500 index came within striking distance of its record high.”

The 24th consecutive record close, mostly fueled by better earnings and our lovely M&A activity. A feather in the bulls caps is the fact that volume followed this move regardless of Option Expiration. It’d be worse to see stocks rise and have volume fall on an expiration date. New high territory for indexes always presents bears with problems. Where to pick the top? Is it now? Is it next Wednesday? You don’t know and picking a top is a dangerous game. Even more dangerous is the “sell in May” crowd completely missing out on this move by large caps. Many investors can not stay disciplined enough to stay on the sidelines for long periods of time. I fully expect to see some type of “oh sh*t” moment by traders.

The “oh sh*t” moment presents shorts with a lethal dose of buying frenzy. Perpetuating the circumstances worse will be the shorts that get scared and start covering their positions. It will be a panic moment in the market at some point. Of course, price and volume will be telling the story just like the follow-through on 3/21.

I’ve been quite down on the market rise but haven’t let that “opinion” ruined much of my trading. I was able to get out of QID and SDD with less than 8% losses and kept cash on hand to buy a few stocks. There isn’t a magic formula or simple red and green arrows directing you to success in the stock market. It takes much more due diligence on the part of “YOU” to get better!

I am still recommending to our long crowd to keep positions on the small side!

Aloha and enjoy the weekend.

Aloha,
Market Speculator

marketspeculator@gmail.com

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