Market Report What can stop the Rally?
By
Todd Horwitz Chief Strategist BubbaTrading.com
Be Prepared not Surprised.
Markets exploded last week, buoyed by economic data, earnings, and the jobs report. Add this negative sentiment from traders and you have a huge rally. This week will go a long way to determining how high they can go.
We know that markets can go further than we think. As long as traders continue to fight the trend the higher, they can go. Low volume has also been part of the fuel pushing markets higher.
Here is a look at possible headwinds that can derail the rally. The FED is expected to pause in June but start to hike again in July. With Friday’s artificial jobs number, the FED may have to reconsider. Complacency is probably the biggest fear as the VIX continues to fall, making a 14-month low.
The Option market returned to somewhat normal with call buyers taking the top spot. Put buyers, Bull Put, and spread sellers, Call spread sellers. Volume has been light and lacks some liquidity.
The bulls were buying NVDA, AMZN, AAPL, MSFT, and SQ. The bears were selling BX, GLD, TTD, MDB, and XLE. Markets lack volume and participation.
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