Few key resistance and support lines have set up and we continue to bounce between them in the premarket.
After yesterday’s close we bounced off support at $319.20 and then this morning we bounce off resistance close to $319.90. As I write this, the SPY has been moving up from the low after close yesterday and currently, the SPY is at $319.75 in the premarket, above the $319.90 resistance line. Needless to say at this point, because the SPY has pinballed off these resistance and support lines fairly regularly this week, they need to be respected. So I am going to be watching closely the early price action before alerting the trade of the day.
Despite the increased volatility I mentioned this morning, I don’t believe it is yet time to bet against this market. I do believe the market will continue to melt higher toward the end of the year with a few days of small pullbacks. This said I will be watching how the market opens. With the heavy selling at the end of the day yesterday, we may see a pullback early on. If this happens, in order to trigger the trade of the day, I will be patient and look for a clear bounce off a support line at $19,55 or $19.20.
If I see this it will trigger a buy to open followed by sell to close call option move today. However, if like yesterday there is buying right out of the gate, I will not jump in unless the SPY breaks the 319.90 resistance line and then 319.90 sets up as the new support and its clear SPY wants to run to new highs supported by market indicators. In order for this trading plan to be in play, SPY must remain trading above a support level near $319.20. Keep these resistance and support lines in mind if you want to play one of the intraday dips today. Resistance: 319.90, 320.05, 320.25 Support: 319.66, 319.50, 319.38 Today’s Trade of The Day is SPY December 23 320 Calls
YAYO is already up this morning on good volume, so if it comes down some I will be looking for entry above $1.50 for a swing i.e. gap recovery and go.
WATT is a sleeper that continues to drift. I think this is a good January effect stock so I’m looking for entry if it holds onto the $1.80’s. Probably a boring trade but could reverse easily and squeeze if the company has any good news to start the year.
Finally VERI, which was great to me in the beginning of the year but I traded it very poorly to finish with that big -$50,000 loss a month or so ago. Putting the past behind me, it’s a drifter like WATT and double bottom with the potential to be a January effect trade as well. In play above $2.50.
