SPY ready to close red into the weekend

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The market made a big move higher yesterday and kept running up to all time after-market highs above 328 before coming back down to where it closed.

Today in the pre-market the Spy bounced off support at $326.75 and has made lower highs. 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 and crossing on the 15 minute charts.

The SPY is in another tricky spot this morning. Futures are slightly red, overseas markets are down, but we have had some positive earnings news and the spy looks like it might open close to where it closed. It has shown potential to move higher given what we saw the past few days but it’s a tough call here.

I will make this call based purely on our indicators. I believe because of the moving averages at the moment, 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 $328.15. If I see these it would trigger a buy to open followed by sell to close put option move today.

Resistance:  327.95, 328.15, 328.25 Support: 327.61, 327.41, 327.21 Today’s Trade of The Day is SPY January 17 327 Puts

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