ETF NAME – SPDR S$P 500 ETF
TICKER – SPY
MY OPINION (JUST MY THOUGHTS, NOT ADVICE) – Bearish, I feel it will go down in the short term
STRATEGY USED – no position
My Thoughts On
My gut feeling is that this market is due for a pullback, and the SPY is about to go down in the short term. I don’t think I know anymore or less than the next guy, and like I always say, buyer, or seller beware. There is risk involved. Lets look at the chart below though.
The Bollinger Bands see the SPY pulling down from the top BB band. It is still well in the upper channel, and even the bottom band is pointing up.
Fibonacci Pivot Points
Currently above R3 at 282.41, if SPY losses support, the next support is 278.69. It is the end of the month though, and as a rule of thumb, I don’t open any positions this close to the end. That’s just me though. If you have any thoughts, I’d love to hear them in the comments below.
As shown above the RSI is currently at 68.06. Usually you see a big dump as it crosses downward from RSI =70. Since it never crossed up and over to a solid overbought zone, I don’t expect to see any massive selling.
No confirmation of a sell signal from the MACD today. Waiting for confirmation is what separates the newbies from from the people who still have money to trade with.
The Stochastic indicator is in the overbought zone, but not really giving a clear sell signal either. It’s usually the first to flinch.
Like I said, I hate to open trades at this time of the month, and I don’t have a position on SPY at all right now. If I was going to do anything, I would probably sell at 289 / 293 call spread for October 2018 expiration, 57 days until expiration. As of right now, I could collect about $104, and my max risk would be $294 (400 to cover the spread, less the premium I collected.
TopJunkies is a blog about stock trading for beginners, experienced traders, or anybody who wants to learn about investing in the stock market. The content here is for educational purposes, and not to be taken as financial advice. I am not a professional financial adviser. There is risk involved, and you may lose money.