SPY is right at the 50 day simple moving average line. Something that cannot be ignored here is on a daily chart, the last eight times SPY has gapped up in attempt to break the 50 day simple moving average line resistance level (current read is 294), it has failed and pulled back.
Off that pattern, an active trader should be looking for a put option entry using a Head and Shoulders keeping 294 in mind off the charts as strong resistance, or, a make or break level for put options. “Shorting new highs” was the way to go in August and considering it’s only the second day of September, it’s simply too early to proceed otherwise without essentially gambling to me. It’s working off a pattern which would have been costly to fight against in our most recent trading sessions, as in, the month of August.
Wall Street will be on the lookout for this resistance rejection to take place within the first hour of trading. If it does, one should consider to be an ideal entry price for buying to open followed by selling to close SPY put options. If that doesn’t take place within the first hour of the session, as in, SPY has broken above 294 and it may be time to go back to the drawing board,
Resistance: 293.50, 293.94, 294
Support: 293, 292.81, 292.50
Today’s Trade of The Day is SPY September 9 293 Puts