Futures are down this morning. The SPY is currently sitting at 238.44 in the premarket. In the premarket charts 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. We also are seeing less volume this morning compared to recently.
Our momentum indicators are pointing down at the moment and the low of the premarket is 329.29. Additionally, the VIX has risen this morning to 83 but has pulled back in the last half hour. All of this said, because the moving averages, VIX remains above 70, our recent downward trend and the fact that the SPY has not made higher highs in pre-market, I’m going with PUTSs today.
I’ll watch closely at the open. If the SPY moves UP I would wait for a reversal off a support line (possibly 240 or 242.50). A few other ways to play a reversal for PUTS is off the 10 or 20 MA lines on the 10-minute chart of the TOP of the Bollinger band on the 10 minute chart or if you see the ticks start charging lower. I’ll also look for the vix moving up (or just staying above 70) or I’ll look for selling volume to confirm my decision.
Two important things to continue to keep in mind. Volatility will make the price options VERY expensive and may whip the price around to places that may be beyond your risk tolerance. You have to trade what is right for you.
Resistance: 238.70, 239.50, 240
Support: 236.59, 235.30, 234.40
Today’s Trade of The Day is SPY March 25 215 PUTS