spy11-28-11

Options Trading Signals – Late Afternoon Post

By JW Jones – OptionsTradingSignals.com

I know I have been unusually quiet today, but there has been little to discuss. The price action today is very strong, and I certainly would advise against shorting into this move higher. Volume remains a bit light, but we are coming into a seasonal period of time where volume is light and there is a continual bias to the upside. Part of the upside bias has to do with the light volume, the other side involves performance anxiety by money managers who are trying to hit their performance marks going into year end.

The S&P 500 is still trading right around 3% higher which was where it was this morning. While there has been some backing and filling, I am quite confidant we are going to end the day with higher prices. Interestingly the U.S. Dollar Index has been holding up pretty well. I will be watching that area closely into the bell and into tomorrow. Traditionally we would expect to see some form of retracement of today’s move tomorrow which may offer an entry point.

I would point out however we have a large gap on the daily chart of SPY which may get filled in the near term. The daily chart of SPY illustrates the gap below:

Gold and silver are getting a nice push to the upside. However, oil prices pushed higher but sold off sharply and are well off the highs of the session. I would also point out that 10 Year and 30 Year Treasury futures are trading higher for the session. The 30 Year Treasury futures daily chart is shown below:

The price action in the 30 year Treasury Bonds is interesting to say the least. The price action in Treasury’s as well as the relative weakness in oil puts a fly in the market’s chardonay. I think the close today and the price action tomorrow will give us a better idea of where we really stand. For now, I’m not getting involved in this price action at all today.

Let me know if you have any questions.

J.W. Jones – OptionsTradingSignals.com

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