Following my holiday in the sunshine, I am are back with your 08th November 2018 Thursday morning market update; hope you have had a good trading week so far?
following the election and the fact that some of the current policies will remain in place that is for the better as the economy will continue on the previous policies.
The bigger part is the rebound from what we saw in October, it is consistent with what my previous market update. After the selloff started we saw the long upper shadow and we had a surge down and it rallies very quickly.
We have recovered two third of the selloff. I do not think we will have a selloff from the current highs, we may give back a little and continue upward to 26500 points as it is consistent with the selling pressure we have seen recently in 2016 and early 2018.
See the February 2018 selloff experience which was more than the October 2018 selloff. We could have a sell off like we did at the end of February 2018 but November and December tend to be bullish months. We should be back to the highs by the end of November.
ADX is starting to turn around revealing the bearishness is done and the bullish is starting.
S&P 500 is a similar song with a different verse as the DOW JONES.
The gap on the S&P 500 is a strong sign for bullishness and strength. Oscillators have a lot of room; ADX and Bollinger band are showing signs of strength.
The NAS 100 had a good day with 194 points, the NASDAQ did not close above the 50 period MA though the other 2 indexes have closed above the 50 period MA but notwithstanding the NAS100 is showing signs of strength.
Do not be surprised with a few days of selloff but nothing to be worried about.
See below some trade idea to take some new positons and drop me a comment on how the trade ideas are coming up for you.
YOUR TRADE IDEA
The trade idea for today is an ETF with ticker symbol SPXL that trades the S&P 500 3x, it is a leverage S&P 500 a 3x version of SPY. It can be compared to SPY.
This is a straight bullish trade;
Entry is at $48
Stop is at $46
Target is at $55
The risk reward is a ratio of 7:2, which is a great reward risk ratio. You can trade options for December 2018 in the money with open interest at $45 (4.60/$5).
Let me know what you think about it in the comment box below and see you soon.