Market Update & Thursday Q&A
Market Update Hello Smart Option Sellers! The markets are still trying to figure out what to do. We have lots of volatility and lots of swings higher and lower. At the moment, it looks as though the odds are on more downside activity. All the indices (Dow, SPX & Nasdaq) are getting very close to long-term support areas on their 200-day moving averages, which are basically the last line of defense for the bulls. Here's the current charts of the Dow, SPX & Nasdaq. You can see on each chart that the indices are getting very close to their 200-day moving average levels of 23,411, 2,589 & 6,741 respectively. If those levels are breached for a few days of trading, then we may see some extreme selling that could take us down very far, very quickly. But, if those levels hold, we could see a major bounce. The tech-heavy Nasadaq has been taking the brunt of the selling of late with Facebook & Amazon shedding billions in value in just the last few days alone. Facebook has been reeling since the Cambridge Analytics story broke wide open last week and Amazon dropped over $100 per share yesterday on the heels of Trump's tweets about it not paying its fair share of taxes. These big moves scare market participants and then things start to snowball on itself. That's how large panic down-moves occur.