We saw SPY fall yesterday and keep going lower overnight. The SPY is currently sitting at 330.90 in the pre-market having bounced off support at 330.50 a few times.

In the premarket charts at the moment we see that the 10 moving average line is below the 20 moving average lines on the 5, 10, and 15-minute chart. A downward signal. In addition, buying volume is elevated from at this point than it was yesterday.

The SPY has been trending higher but as I showed in the pre-market video it’s sitting on the 3 moving average line on the daily which. A moving average line that has turned sideways.  Futures are down, overseas markets are down and we currently are looking at a gap down of a half-point. So the SPY is in a tricky place to trade here.

Does this dip get bought up or does it continue to fade lower. I’ll play this one by indicators pointing down. If the SPY pops for some reason I would wait for a bounce off resistance or if it just moves sides ways I’ll look for buying volume to confirm my decision. In order for this trading plan to be in play SPY must remain trading below that key resistance level near $331.37. If I see this it would trigger a buy to open followed by sell to close PUT option move today.

As a reminder, I encourage you, if you do jump in, manage your stop loss according to your tolerance.

Resistance:  330.93, 331.15, 331.31

Support: 330.70, 330.61, 330.49

Today’s Trade of The Day is SPY January 29 330 Puts

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