Are We Heading for a Market Fakeout?

THE WEEK

In spite of all the political controversy over Joe Biden’s mental capacity, the stock Market is showing some resilience.  It jumped to another hew 52-week and all-time high on Wednesday.   Then begin butting its head against that resistance the rest of the week.  I do a lot of premarket research each day and saw evidence that this might happen.   Here is a section of my AMMO Journal (AM Morning  Outlook). 

Notice on Wednesday morning, I saw a big jump in the number of 52-week highs.  And I thought, here we go for another surge up.

LOOKING AHEAD

I expect another calm up Market this coming week.  There are no economic announcements coming out that usually rock the Market.  The only event I will be cautious trading around is Powell, the Chairman of the Feds, has a scheduled speak at 12:00pm Eastern on Monday.  As head of the Fed, which controls short term interest rates, he has more influence over the U.S. dollar's value than any other person. Traders closely watch his speeches as they are often used to drop hints regarding future monetary policy.

This is also the beginning of the heavy earnings announcement with this coming week ramping up and the following week with a huge number of announcements.

HOW AM I DOING?

It was an OK week.  I had three trades that didn’t do so well when the stocks took a little downturn despite what the Market was doing.  My icon condor CALL vertical also was in trouble as the stock suddenly surged up.  All my other trades did well.  So, I ended up making a very modest gain.  I am OK with that as I know the bad trades can be massaged back to a profit.

This Week’s Deep Dive

During Thursday’s webinar, a listener requested I discuss the increasing risk factor as the long and short positions get further apart on Credit Diagonal Spreads (Money Pres trades) because the Market is going up.  This is one of my favorite subjects!