Posted by Pete Stolcers on September 26
Posted 9:30 AM ET – Yesterday the market probed for support and the SPY bounced before it challenged $248. Tech stocks have been weak relative to the S&P 500 and we are seeing a rotation out of this sector and into energy/retail. The QQQ bounced just above the 100-day moving average and I like these stocks with earnings season approaching.
I am going to buy November call options on some of the tech leaders this morning. I will use QQQ $141.70 as my stop on a closing basis.
Swing traders should own calls as long as the QQQ stays above that level. For stocks that are not QQQ components, use SPY $248 as your stop on a closing basis.
The news has been very light. Apart from North Korea, the macro backdrop is bullish.
Day traders should look for opportunities to get long this morning. I don’t believe we will see much of a dip.
Yesterday buyers pulled bids and they gauged profit-taking. The volume and that is bullish. Stocks found support above major levels and the bounce this morning could gain traction.
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