The Big Question
Does last week’s rally signal the beginning of a move to new market highs, or is it only a set-up for a further decline to new lows? As interesting as it may be to speculate on the market’s ultimate direction from here, a more important question remains.
The market’s recent strength proved enough to turn the weekly trend analysis positive, although not (yet) overwhelmingly so. What does this portend for May’s option expiration, coming up in two weeks?
That’s the Big Question.
In a word, it’s encouraging. It suggests that from here the market may be more likely to be up or sideways than down going into expiration. Since most of my short puts are currently out of the money this would work out well if it proved to be the case. But we’ll see – as always a lot can happen in two weeks.
This week I added Nokia (NOK), Unilever (UN), and Washington Mutual (WM) to my watchlist. They were among a variety of stocks that triggered as showing breakouts on my weekly scans. Other stocks of more speculative interest that are on my list include Affymetrix (AFFX), Papa John’s (PZZA), Flowserve (FLS), and Universal Health Services (UHS).
