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Market outlook for the next week

On Monday markets will be closed due to President Day observation. For this week we will see a short trading. However, the most important trading happened last week.

In my previous market outlook post I wrote about two patterns the market was about to attack – a wedge pattern and sideways channel.

Last week, the market broke up thru both patterns. It confirmed the break out the next day and marched up to its first resistance at 2094.

It smashed that resistance and create new all-time high!

We now need a confirmation for this break out and I am expecting this to happen next week. Well, to be clear, I am not expecting the confirmation to happen since I do not know whether it happens or not. I am expecting that the market will attempt to confirm it or fail it.

If the market confirms this break out we will have doors open to a new, strong bull run up. As one trader once mentioned, even bulls would be surprised by this bull trend.

If we fail to confirm this break out, the market may fall back down to 2000 level.

What is my bet on this? Since we broke two previous patterns, I would say we have a great chance to break this last resistance too.

This is changing my weekly bearish outlook to a bullish one. Long term, I am still bullish. Now I am bullish short term too.

What is my outlook for the next week?

Let’s take a look at the chart below:
 

SPX

Although everything can happen, I expect the market to continue going up. Tuesday trading may tell us the story, whether the week will be more bearish or bullish. We may see a pull back, we may see a new run up creating new ATH (all time high).

Nevertheless, I expect the market to move in the 2083 – 2104 range, unless unexpected bad or extremely good news override this expectation and move the market to its extremes.

Happy trading and investing!





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