The bulls are making another push ahead of the weekend following 3 days of one of the tightest ranges we have seen in years. The S&P 500 traded within an 8, 10 and 6-point range until yesterday’s pop and the bulls would like to end the week at new highs. Unless the wheels fall off the wagon, it appears the bulls will get their sixth-straight weekly win.
We have been busy over the past few days adding new option trades and locking-in profits when we can. We mentioned yesterday that is important we start taking what the market gives us but we still feel a curve ball is coming.
We plan to be busy as soon as the closing bell sounds because we can’t wait to start our chart work for next week. We normally wait until Sunday’s to paint some pictures and forecast where we feel the market could be heading in the weeks and months ahead. While we remain short-term bullish, yesterday we said we still see some speed bumps for the bulls which has made us nervous going “all-in”.
What we mean by this is that we don’t mind playing calls in a push to the top of resistance and we have done well this week going long. However, we still have our eyes on the rearview mirror and exit door and you will see why this weekend but as long as the trend remains higher, we will ride the wave.
We have said a test to the 52-week highs was possible for the market until month end and from there it will depend on the headlines. Most hard-core chart technicians do not factor in headline news with their analysis but we do because chart patterns can change based on the bullishness or bearishness of the reports.
Next week will be light on both economic news and earnings which are winding down. As long as support holds at current levels, there should be a bid under the market until the end of the month which could lead to new 52-week highs.
September is historically a tough month for the market and there will be a number of events that could shape the indexes for the rest of the year but for now, the bulls have the momentum.
As we head to press, the Dow is up 19 points to 13,269 while the S&P 500 is higher by a point to 1,416. The Nasdaq is advancing 7 points to 3,069.
We usually don’t like opening new positions on Friday but these are cheap options and we are taking half positions. We had to wait for one of the trades to come in a little as the bid/ ask was a little wide but the spread is at a nickel.
Subscribers, check the Members Area for the updates and we will be back Sunday night with the Weekly Wrap and Monday morning with the Daily. Until then, have a great weekend everyone!