Todd Horwitz Chief Strategist BubbaTrading.com
Be Prepared not Surprised.
When the markets closed on Friday July 16th with a big sell off at the close it brought the question, is the rally over? On Monday July 19th markets tanked early in the day taking the Dow lower by almost 1000 points. However, by Friday we saw new highs in the Dow, S+P and Nasdaq.
It appears markets are not ready to go down, we have seen Lumbar fall 70%, Housing markets slow and inflation at levels not seen for 30 years. For now, nothing matters but cheap money and chasing yield which will continue until it doesn’t.
One thing that investors and traders must recognize is despite economic warnings, inflation and other concerns markets will move in the path of least resistance. Money has no conscious and will continue to go where its treated best
The option markets continue to signal new highs should continue Call buyers lead the way closely followed by Put and Put spread sellers. The VIX continues to fall as complacency reigns. It appears that there are no concerns for the mass, the rally should continue.
Tech stocks continue to lead the way with AAPL, SQ, NVDA, TSLA and AMZN were the leaders in bullish options trades. The bears are selling SPY, AG, X, JWN and BAC. In other words, Tech and the Nasdaq lead the way.
As traders and investors, we have one thing to remember, follow the trend of the market. Be patient disciplined and leave your emotions out. The most important thing to remember is money management and self-control.
Todd “Bubba” Horwitz
BubbaTrading.com