The markets showed the first sign of slowing after six (6) consecutive sessions higher. Volatility remained on all-time lows, although we did see an intra-day spike up to 12.86 on the VIX. The markets appeared to react to some uncertainty in new tax laws, along with changes to healthcare, coming in the near future. This could hinder further movement in the markets in the short term or even create some corrective action.
Whenever price action surges, in either direction, it will eventually need to correct. The trick is in identifying when the correction will take place. The first sign is hesitation (e.g., a reversal candle, etc.). We will then need to see a move lower, confirming the reversal signal. This can get tricky unless it is tied to a catalyst of some sort. Keep an eye out for possible news catalysts as we head into the long holiday weekend.
Remember, February options expire tomorrow and the U.S. markets are closed on Monday. Make sure that you are prepared and make the necessary adjustments to your portfolio.
See you on this week's live Trading Room class (moved to Monday night due to holiday)!
Have a great night,
Your Maverick Trading Team
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.
