So Many Charts Are At Key Junctures That Patience Pays

So Many Charts Are At Key Junctures That Patience Pays

Interest Rates are at new highs, which has pushed stocks down to new lows. Oil is also rising. It is time to take a technical look at the markets. – StockNews

So many markets are in critical areas on the charts. These charts can be viewed in a quick overview to help you determine which price points should be monitored for bullish or bearish breakouts over the next few weeks. The key will be held until the Fed meets in early November.

The 10-year Treasury yield is fast approaching recent highs once again near the 4% level. A stock market breakout would likely send stocks to new lows, while a retest of the 3.5% level would be bullish for equities.

The 2-year Treasury yield is at a similar inflection point, albeit with a higher yield. Stock traders would not welcome a move above 4.5%. Note that the 2-10 is still deeply inverted, which is normally a recessionary sign.

The NASDAQ 100 (QQQ) is hovering right at major support near $270. Although not yet oversold, it is getting closer.

S&P 500 and Russell 2000 displaying identical patterns. It remains to be seen if stocks will bounce back or fall further.

Gold and oil are also at major inflection points on the charts, although oil getting a little overbought short-term.

Implied volatility in stocks (VXN and VIX) is nearing the recent highs once again, although not quite there yet. As stocks fall to recent lows, nervousness is common.

How this ultimately plays out is anyone’s guess. I prefer to be hedged and agile, which has been a good strategy in the POWR Options portfolio. The recent semiconductor pairs trade -bearish lower rated WOLF and bullish higher rated AVGO- was closed in one day for a 19% profit.

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What To Do Next?

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All the Best!

Tim Biggam

Editor, POWR Options Newsletter

SPY shares closed at $362. 79 on Friday, down $-10. 41 (-2.79%). Year-to-date, SPY has declined -22. 73%, versus a % rise in the benchmark S&P 500 index during the same period.

About the Author: Tim Biggam

Tim spent 13 years as Chief Options Strategist at Man Securities in Chicago, 4 years as Lead Options Strategist at ThinkorSwim and 3 years as a Market Maker for First Options in Chicago. He is a regular contributor to the TD Ameritrade Network’s “Morning Trade Live” and makes frequent appearances on Bloomberg TV. His passion is to make the complex world easier to understand and more useful for everyday traders.

Tim is the editor of the POWR Options newsletter. Learn more about Tim’s background, along with links to his most recent articles.


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