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My indicators are giving bullish readings this week, an upgrade from last week’s bearish sell signals. Additionally, as money managers allocate capital to their funds at the beginning of the new month, this coming week should have a bullish bias, so we are squarely in the bullish camp.
I will say, though, that there are some signs that we could be approaching a longer-term top for the market. One thing that is positive, however, which suggests that the market should continue to rally or at least stay near current levels, is that we do not have an inverted yield curve here in the U.S. The yield curve is actually steepening in the U.S. this week following the positive results of the Fed’s stress tests on the big banks, which is a good sign.
Almost all of the banks passed; I don’t put much faith in these stress tests. But I do think financials have plenty of room to move higher. So, as long as there’s a bullish backdrop, we’ll capitalize on it with these call options on Bank of America Corp (NYSE:BAC).
Buy to open the BAC Aug 25 Calls (BAC170818C00025000) at $0.55 or lower.
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