The Geo-political fears were eased yesterday and the markets responded in a big way. That continued overnight and futures are green.
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. The SPY is in a tough spot here because the moving average lines are very close to each other and have been moving sideways most of the morning after making another solid run-up early this morning in the premarket.
It has shown potential to move higher given what we saw the past few days but it’s a tough call here. If it gaps up, and it looks like that is the case, I believe because of the moving averages at the moment and the negative jobs report this morning that the SPY could pull back this morning before possibly continuing higher. If it drops, it might happen quickly right at the open, but if not, I would wait for a pull back at resistance or 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 $326.40. If I see these it would trigger a buy to open followed by sell to close put option move today.
Resistance: 326.30, 326.40, 326.50 Support: 326, 325.80, 325.50
Today’s Trade of The Day is SPY January 13 325 Puts