SPY is nearing the “SPY 300” level which everyone loves to talk about. Currently, heavily extended to the upside, which would make sense given SPY’s rally to the upside during last week in general with the exception of a fairly flat day this past Friday. Wall Street will be watching the charts closely leading into the 9:30am ET options market open as I believe we could see a very short term pullback, barring any contradictory news (trade wars, for example).
We may see a “mirroring” affect of European markets today, which is, opening at the highs and slowly creeping lower throughout the trading day. Wall Street’s eyes will definitely be zoomed in on charts for you! Traders need to be patient in timing a put option entry via a Head and Shoulders, likely on a 5 minute chart.
If this sets up within the first hour of the trading session then it may be time to take a short position in SPY puts. It time to be simply being patient with markets as we’re at a level in which SPY may either reject 300 in the short term or break above it. While being on the right side of a put option move could be lucrative intraday, being on the wrong side could be expensive, so I’ll definitely be suggesting a tight stop today (about 10% dependent on charts and price action). Above 299.70 in the first hour and puts will be off the table. If that resistance is broken to the upside 300 could be broken quickly as well.
Resistance: 299.32, 299.50, 299.70
Support: 299, 298.89, 288.50
Today’s Trade of The Day is SPY September 13 299 Puts