Games were indeed played yesterday as stops on many stocks where gunned in the afternoon, only to see prices recover again late in the day. We count all this activity as market noise in front of tomorrow's options expiration.
What this "market noise" has done, however, is make it very difficult to find a good stock set up. Oil prices look like they may attempt a bounce this week, but that too may just be options expiration activity, which is not going to have a lasting impact into next week. Due to the sharp fall in oil, there has been a fairly heavy short position taken in the sector. Options writers would love nothing more than to see a sharp one or two day climb in the oils that would erode profits on open put contracts.
We are doubtful that oil can mount a meaningful longer term comeback from here, so the probable dips in the breakout transport sector may be buying opportunities.
We await to see if the pullback in tech finds buyers. We suspect it will.
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