The Markets Bullish Run Could Have Been Anticipated

Tom Gentile

Posted in
Education

By: Tom Gentile
July 14th, 2023

4 mins read

This article will not read that I or my team predicted the bullish run and the move to $448.60.

It will point out that we educated you all on the prospect of SPY reaching $448.60. That means we anticipated and showed everyone reading these educational pieces how to anticipate a price run to that target price.

Most recently my Tom’s Weekly Newsletter (July 12, 2023) included education that based on a very important scanning tool in my software www.tomsoptiontools.com called Money Calendar and a variation of that called money Holidays gave us the data showing past 10-year history of what the SPY has done 10- and then 15-days post-Independence Day.  It showed the past 10– and 15-day avg. price run for the SPY.

You all can read the past articles to see the images and how we came to the price target of $448.60 for the SPY.

The chart below shows the anticipated, but not predicted, price of $448.60 was met.

Figure 1: 120-Day Candle Chart on SPY
Figure 1: 120-Day Candle Chart on SPY

Options Traders Use Past History to Initiate New Trades

I feel safe in saying investors use past history as well. They may use more past history of a company’s fundamentals like past eps, sales, valuations, etc. to base the investment decisions they want to make now, though.

We, as options traders benefit from the study of past technical chart patterns more than fundamental data to make our options trading decisions right now.

Figure 1 shows you the run the SPY has been on over the past 120-tradings days. One can see the latest bull run started in March of 2023.

We started our education on price projection using Money Holidays shortly before Independence Day.

If one had an options trades on the SPY based on our education we would see it fit to say one could consider closing it based on the SPY hitting its anticipated price.

What Now for the Markets

We are not in the prediction business and anyone trying to be when it comes to options trading would be remiss in doing so.

We can anticipate price action and here is one prospective scenario that may play out in the equities markets, specifically the SPY.

Figure 2: 120-Day Candle Chart on SPY with a Resistance Price Level Highlighted
Figure 2: 120-Day Candle Chart on SPY with a Resistance Price Level Highlighted

Just like anything I or my team write we speak in terms of what could happen and or what we anticipate as a possibility.

We are not in the predication business, but we do analyze past price patterns and see what consistencies or repeatable price patterns happened and then extrapolate or anticipate that happening again. We then look to build acceptable risk options trade around that anticipation and manage the trade should we actually take it.

This bull market run can very easily continue for all we know.

Even with the Prospects of Inflation Cooling Off

Options traders as well as investors have seen both the CPI and PPI come in lower than expected, which gives an indication inflation may be cooling off. That does not guarantee the Fed will ease up on raising rates.

As they take a wait, see attitude, and look for the future data on how under control or not inflation is to signal their course of action, traders are in a wait and see what the Fed is waiting to see mode and they may get nervous and take money (profits?) off the table in anticipation of that.

That could bring the markets down in price.

If a pullback in price happens we will be watching what SPY does at the price level of Old Resistance and see if it becomes New Support at $444.

App: Toms Option Tools

Toms Option Tools scan the markets for bullish and bearish trade opportunities using our proprietary scans and strategy algorithms. TTR Darknet finds bullish entries based on triple stack channel collisions. Money Calendar identifies seasonal patterns with at least 90% accuracy looking back 10 years. Weekly Cash Clock finds short term opportunities that last a week on average. Microcurrency Trader applies Darknet technology and moving averages to cryptocurrencies. Velocity Trader utilizes volume spike and Velocity indicators on custom stock lists. Quantum Scripts scans the markets for momentum acceleration signals and employs Quantum noise filters. Optimal Trader finds directional pre-earnings opportunities that are optimized for entry date, stock movement, and volatility surge. My Trades tracks the profit/loss of your trades, displays stock charts and risk graphs, creates new trades, and edits existing trades. Morning Report provides top 10 option rankings in 6 categories each day.


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