The Geo-political fears continue to ease and markets continue to rise. That continued overnight and futures are green.
In the premarket charts however, at the moment, we see that the 10 moving average line is below the 20 moving average line on the 5, 10 and 15-minute charts.
For new members, we use this as an indicator of a pull back. The SPY continues to stay in a tough spot here because the markets are, by most people’s accounts, overextended and yet north they continue to push. It has shown potential to move higher given what we saw the past few days but it continues to be a tough call here as gains have recently been made overnight, yet high risk exists to hold overnight.
That said, If the spy gaps up again this morning, and it looks like that is the case, I believe because of the moving averages at the moment and the miss on jobs report this morning that the SPY could pull back this morning before possibly continuing higher. Like Yesterday, If it drops, it might happen quickly right at the open, but if not, I would wait for a pull back at resistance on what’s been referred to as a head and holders pattern to confirm the move lower.
In order for this trading plan to be in play SPY must remain trading below that key resistance level near $327.44. If I see these it would trigger a buy to open followed by sell to close put option move today. If I see this happen in the first hour of trading and it shows me a conviction.
Resistance: 327.30, 327.44, 327.50 Support: 326.95, 326.84, 326.60
Today’s Trade of The Day is SPY January 15 326 Puts