Another gap higher this morning, and gap rules normally would apply. However, today is weekly AND monthly options expiration.
Given the distance traveled yesterday and the fact we are at my initial target of 4450, there likely is an opportunity for the early fade.
From there, we usually see a lot of balancing on options expiration.
Next week is likely to tell us whether this is a one-hit-wonder or move up to challenge or at least tag the old high. I am betting on the latter.
Stay tuned for more details on the weekend.
By the way, I will formally name yesterday’s set up as the “Cradle Trade.” It will go in the glossary for future reference.
I don’t trade options expiration, so my next writing will be Sunday. Have a terrific weekend.
A.F. Thornton