Posted 9:30 AM ET – PRE-OPEN MARKET COMMENTS TUESDAY – I sound like a broken record so let me keep the comments brief today. There are very strong opposing market forces in play. Stocks are priced for perfection and the backdrop is not perfect.
Swing traders should keep their powder dry as the market loses its longer term momentum. Sparingly sell out of the money bullish put spreads on stocks with relative strength. Distance yourself from the action and take advantage of time premium decay and seasonal strength. If December ends well off of the all-time high, 2022 could be rough. I believe that the market could form a horizontal trading range that lasts a few months.
Day traders should take advantage of big intraday swings. This morning the S&P 500 is jumping. Global markets were generally strong and they are providing a springboard. Don’t chase the opening gap higher. Wait for a dip or a compression and use that time to find stocks with relative strength. As always, stocks that are breaking through technical resistance on heavy volume will be your best prospects.
Support is at SPY $452 and $461. Resistance is at $467 and $472.