Whats the Market going to do on Monday?

What the Market is going to do on Monday really depends on data that is outside the realm of technical analysis, because news almost always trumps analysis. First of all to answer the question what is going to happen Monday, we look at the charts, and then we will look at the reports and events that are going to be happening next week.

To sum things up as someone who recommends calls or puts, I would throw down a spread early on Monday morning, a  spread on SPY (for more volatility than QQQ) to get more out of the crazy movements that are going to occur during the week. Remember, as Bradley Cooper said in the movie 'Limitless' (paraphrased): Its not what the actual underlying numbers say that drives the stock, its what people perceive them to be that moves the stock.
So to start here is the chart for the QQQ (The Nasdaq):

I am using the Money Flow Index along with the Relative Strength Index. Both of these put together really do a good job of calling tops and bottoms. Another thing that the MFI indicator is good for is something that I call "Force" which is a good indicator telling how strong upward a pull in the price is going to be. For example, you can see in the above chart I have highlighted the bottom of the QQQ in yellow rectangles at the same time point for the RSI and the MFI. Now here is the concept of where 'force' comes in. The MFI and the RSI have risen too much to almost halfway up the indicator (at the 50 mark) without the stock hardly moving up to match the 'force' of the movement. If you followed the math upwards, its saying that it would be maxed at the top or 80 with the stock barely at 110 instead of the previous top where the stock was at a much higher price. Thus the force movement for this index is weak. Thus the pull upward for a higher price is weak. Thus there is something wrong in the market where traders are not really about pushing this indicator for the Nasdaq up to new highs.

Next Week According to Cramer

 Here is a graphic what is going to happen next week. Wow. What a minefield full of potential highs and lows depending on how all this stuff hits the wall. On Monday, Data on how Europe is doing. Thats important as that directly affects our market. That could go either way.

Things coming up this week with Friday as the Biggie

Tuesday has some big stocks reporting that could affect the market to the up or downside. Wednesday a few other big stocks with Costco having an American Express divorce. That could affect the market as Costco is now using Visa. Thursday is stores that offer deep discounts, such as Dollar Tree and Dollar General. And Friday Janet Yellen speaks. That of course, is the big one. If she says that the Fed is going to leave the rates alone, the market is going to go up, with the opposite if she says they are going to raise rates. Or more confusing yet, she could say that the Fed will leave rates alone and traders could see that as a signal for weakness and start to sell causing the market to go down, or just the reverse. Believe me, I have seen some bizarre counter intuitive shit as far as the market goes. Trying to play it one way or another without the benefit of time travel is very difficult. So why not take both?

This is how I'm going to play it: At open on Monday I am going to purchase a spread at the money via SPY. Then I will see how things go thoughout the day. If something causes the market to jump or crater on monday, I will simply exit the spread. Right at the end of every trading day before the market closes I am going to purchase another spread on either the QQQ or SPY. That way if some news leaks out before market open and the market opens big or drops big at open we can exit after making our money. So on monday morning, spread. 15 minutes before market close, new spread at the money on QQQ or SPY. Then 15 minutes before close Tuesday, new spread at the money on QQQ or SPY and do this onward each day until late thursdays spread on the QQQ or SPY for Friday.
After this newsy week, we can go back to just using the indicators for our buying and selling.
Now of course we will have to be careful as we are going to have a lot of spreads out there, we will have to watch our account, the prices and the news to maximize our in and outs. Its interesting that even the iffy news has built itself into the indicators showing weak 'force'.

So instead of comitting either way in the markets next week and getting whipsawed with the various bursts of news thats coming out Monday-Friday, be ready with a bunch of spreads. But not just any old spreads. Cross spreads. I like to buy in the money so that when a stock goes one way, it doesnt leave an option sitting there all by itself out of the money depreciating rapidly as the train pulls away. Cross spreads are buying a half dollar or a dollar in the money. Its a bit more expensive but it can help you if something goes the wrong way and then the news blows the price again back toward you the next day. Same thing with the puts.
I am all ready for this and look foward to next week.
Play to win,

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