Todd Horwitz Chief Strategist BubbaTrading.com
Be Prepared not Surprised.
Two things have been very consistent for the last few months, call buying is leading the way and equities continue to make new highs. Many have tried to call the top and have been burned. The most important thing to remember is to follow the trend which is the path of least resistance.
Equites continue to rally on light volume which is consistent with a market grinding higher. The daily ranges continue to shrink which leads to a falling VIX and quiet markets. We are experiencing complacent markets that slows everything but does lead them higher.
We can’t predict the future which is why we play the current trend of the time frame which you trade. Different time frames can create different trends, but swing traders should always play the longer-term trend and that is higher. Obviously, there are different stocks and ETFs in bear market while the general market trend is up.
Another week the option markets was dominated by Call buying followed closely by Bull Put Spreads. Bullish strategies on the top of the board. There is some Put buying and some Covered call writing which is what is keeping the pressure on the VIX. More options are being sold to open versus bought to open.
With earnings season starting to wind down we still see tech as the leading bull symbols. The top 5 for the week were, AAPL, NIO, SNAP, AMD and TSLA. Bears have started to appear in MSFT, QQQ, VXX, SPY and IWM. It appears the bears are trying to take control but the odds favor failure and higher markets.
Todd “Bubba” Horwitz