Today's rally was not unexpected with only three days left in the quarter.
The major averages failed to regain their highs or even the resistance levels from last week. Volume was absurdly low at only 6.8 billion shares due to the Yom Kippur holiday. That was the lowest volume day since July 10th. It was a short squeeze on the merger news and end of quarter window dressing and nothing more.
Our old friend Walter Energy rebounded +3.35 and Hartford gained +2.78. These momentum stocks got one more shot of fuel from the fund managers to keep them near the highs until September expires.
I see no opportunities tonight to sell puts on Tuesday. If this were a generic newsletter I would probably be getting long puts rather than short. Everything still appears to be setting up for a drop after Wednesday or more likely after Friday's jobs report. Longs may hold out hope for a blowout jobs number. Unfortunately the last two months are likely to be revised lower so any unexpected news could be down. I would love to see a boost in jobs and I would love to see the market continue higher even if we are not in it. I am just highly doubtful it will happen without at least a minor pullback once we are into October.
However, I think nearly every trader in the market is thinking the same thing. You know what happens when everyone stands on the same side of the boat. The boat capsizes and the opposite occurs. Time will tell.
For Tuesday, no change, no new plays.