Options Week Starts out Tepid

A couple of times last week we have brought up the fact that trading conditions are poor and that opening a new position under current conditions is inherently too risky at this time. Today conditions are as poor as ever. We continue to believe that shorts are at risk of getting squeezed while the market trades sideways or makes another attempt at recent highs. Longs risk false breakouts. Conditions right now are ripe for brokerage houses as commissions get churned, they are ripe for options sellers who look to profit as contracts expire worthless, and they are terrible for the rest of us. Hopefully a bias will work itself out one way or the other this week. There is at very least a strong potential that such a bias will present itself in gold and energy stocks. Energy could go either way here. We could see it undergo serious profit taking or we could see another explosive leg up.