Option Expiration Coming Up
Each evening we focus on the most interesting aspects for the upcoming trading day. The comments are based on observations of the nightly updates of the Stocks/Sectors and Market Bias pages. They are provided for educational purposes only and are not intended to be direct trading advice. Also, keep in mind that these remarks are made up to 12 hours in advance of the markets opening. Therefore, overnight events may alter the outcome of these observations.
At the time this is being published, the S&P Globex Futures are trading .40 points higher and the bond market is trading up 2 ticks.
Heads up, tomorrow is triple witching (option expiration). This should make for volatile trading.
Tonight, we have 4 indicators pointing higher on the Market Bias Page. This suggests a strong upside bias for tomorrow.
On Tuesday night, I talked about how I like to draw a trendline from the recent highs in strong pullbacks and then wait for that trendline to be broken before attempting an entry. Notice today that Bea Systems [BEAS>BEAS], mentioned over the past few nights, broke through that tendline today (a). This suggests that the longer term uptrend may be resuming.
Autodesk [ADSK>ADSK], mentioned recently and in the strong Software Sector [$CWX.X>$CWX.X] still looks like it has the potential to resume its uptrend.
On the Pullback List, HNC Software [HNCS>HNCS] rallied sharply out of a deep pullback (a) and looks like it has the potential to challenge par tomorrow. Just use caution here as this one is a wild one.
For you breakout players, Computer Network Technologies [CMNT>CMNT] , on the New 60-Day Highs on Double-Volume List, looks like it has the potential to rally out of a high level triple bottom formation.
Best of luck with your trading on Friday!
PS – Reminder: Protective stops on every trade!