It's also worth noting that next week is Presidents Day, which tends to bode poorly for the SPX, and what we consider "weak breadth" often precedes weaker-than-usual SPX returns. And while we recommend not disturbing bullish positions, the massive short covering of late could point to a lack of fuel in the tank, as Schaeffer's Senior V.P. of Research Todd Salamone recently noted in Monday Morning Outlook. Against this backdrop, traders should consider the purchase of short-term in-the-money call options as a "stock replacement" strategy, allowing you to participate in a continued trend higher, while at the same time decreasing your dollars at risk.
Don't miss Schaeffer's free weekly stock market forecast. Sign up now for Monday Morning Outlook.
SCHAEFFER'S PARTNER CENTER
Visit Schaeffer’s Broker Center today to open your account and gain access to exclusive offers from top brokers.
Indicator of the Week: What the S&P's Quarterly Win Streak Means for Stocks
Dow Jones Industrial Average Blasts Higher With Bank Stocks
Dow Jones Industrial Average Futures Dip as U.K. Triggers Brexit
Consumer Confidence Helps Dow Jones Industrial Average Rally Back
United Health Services Stock Surge Could Continue in 2Q
Oversold Signal Flashing for First Time in 2017