Options Outlook: Forget About Oil For Now

Scoreboard: The week ended on a sour note for the bulls. Friday was a complete disappointment. Not so much for the final Friday score of -.5% but from where Friday started. The Nasdaq minis overnight overtook the July highs for example. 2.5 hours in on Friday, oil spiked and took markets green but the oil breakout was a fake out (though closed green). The market run fizzled (fell well short of overnight highs). They did try again late in the day only to lose it at levels that earlier in the day were support which then flipped to resistance. But it's not all bad new. The week ended green for the SPY and QQQ. The small caps IWM had a red doji. Furthermore, October turned out to be a monster month for the bulls. Monday: Bulls have the chance to recover back to Friday's highs but will depend on how markets will react to economic news. Bad economic news should spark rallies. The US government jobs numbers late in the week will be THE catalyst to watch. Meanwhile, the ADP reports could give traders a preview of how the Friday reaction will be. The weekly options open interest weekly setup still favors the bull. The bears don't seem to be participating at this point so they'd be the wrong horse to back with confidence. Watch short positions. So, instead of giving you trade ideas for the week I am going to suggest that it's best to skip the 11/6 weeklies and to hedge existing risk (trades) that could be under pressure with a big move in either direction. Furthermore, I would like to suggest that it's best to skip all oil company trades until this economic war between Opec and the US is done. Until then I avoid them because the oil market is rigged! They are like biotech: Any day they can move +/-5% on a surprise move in oil (for no fundamental or apparent reason). I cannot invest in anything like that. It'd be more gambling than investing. I did however call their demise from much higher level out in public (was on record). Focus points: How Apple behaves around 119.3. Apple is a heavyweight and will move or weigh down markets the indices. Small caps: They still have a lot of catching up to do. They have bullish options weekly set ups for it but they just need to commit to upside. They are likely to decide the direction of the next major market-wide move. Economic reports mainly the government jobs data. We do get a preview from ADP earlier in the week. Strong economic reports should be bad for equity market bulls and vice versa. >>> The week has the potential to be violent in either direction so caution is warranted. Levels: The indices are well setup to reach for new highs or revert to the lower range of late. The outcome is almost too binary.