The markets continued lower from last week’s move, confirming a bear rally. Today, we saw the market hesitate on support – as discussed in Sunday’s live, weekly Trading Room, we will need to see if support will hold. We should see volume continue to pick up over the next few days and could see opportunity in either direction this week.
Technically, we could go either way from here. The good news is that we can enter trades regardless of direction. If we can move above today’s high, then look to add some slightly bullish to sideways positions. This could be the beginning of a decent bull move. On the other side of things, we could break below support, creating a nice bearish opportunity. With a break down, we could see some short-term aggressive movement, where straight puts and short-term bearish spreads could prove profitable.
Once the markets break out of this range in either direction, we should expect a correction or consolidation. If you are looking to play things longer into February or March, then take this into consideration. Take your time in building your portfolios, stay patient and don’t force trades – the good ones should develop nicely over the next few days.
Have a good night,
Maverick Trading
Over the years, we have spent thousands of hours talking with our traders and answering their emails. We have a huge collection of really great information that only benefited the specific traders who we were interacting with. So, we decided to start sharing all of these gems of knowledge with everyone.
