Monday’s market is a non-event. This is a very normal phenomenon after a breakout. In fact, this is the kind of setups that I expect to see after a strong rally or a crash. Exactly why they happened this way is not clear. I can only speculate that it was due to profit taking. Anyway, we don’t really need to care what happened behind the scene. What matters is they happened and is within our expectation. Both the Dow and S&P are displaying a Hanging Man candlestick bar. This is a bullish sign.

Comes Tuesday, I think the bullish momentum will continue. This should last for a few more days, barring for any unforeseen circumstances such as unexpected news. If you have already taken new positions, hold on. If you are looking for new stocks that would fly, check the section below on Stocks to Watch.

DJIA Daily Chart

S&P500 Daily Chart

For options traders, don’t forget to start selling puts or Bull Puts on major indexes such as the Dow, S&P, and RUT. I like the e-mini’s of these indexes, namely YM, ES, and ER2. These are safe markets to trade for now. Bull Calls are equally excellent strategies for a newly developed bullish trend. Have fun.

Play to win!

STOCKS TO WATCH:
GM, NYT, CBG – for bullish breakout.

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