Market Report Rally on light volume
By
Todd Horwitz Chief Strategist BubbaTrading.com
Be Prepared not Surprised.
The shortened holiday week saw buyers return to markets. The trend remains lower, but the bulls were in control last week. Commodities were hammered relentlessly in what could turn out to be a deflationary scenario.
Last week’s economic data was weak including Friday’s jobs number which is being touted as good until you look deeper into the numbers. Jobs created is only bring back the ones lost during Covid. Growth is weak and we are in a recession.
Expectations are for another negative quarter of GDP which has been the recent trend. The FED is set to hike rates again, trying to slow inflation. The energy policy is continuing to hurt markets and consumers. All signs point to a continuation of the bear market.
Option traders appeared to be playing the long side of the markets. Call buying always holds the top spot which is not always bullish (we don’t know the other side of the trade) but put and put spread selling can only be interpreted as bullish. Rounding out the top 5, Iron Condors which is neutral some call selling.
The bulls were chasing after AAPL, BABA, CHWY, SWN and MU while the bears were selling, BAC, SQ, DLTR, SPXW, and TNA. The market picture is mixed because of the extremely light volume.
Remember, we can’t predict what’s next, but the price action will give indications and guide us in the right direction. All signs are starting to point lower however flexibility is the key to trading successfully.
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