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Thursday, March 28, 2019

Daily udpate 3/28 SPY option data

Inside day, but a test below 2800 found buyers again.

SPX rebounded a little bit today.  This is the second day in a row a large sell program hit the market shortly after 10:35.  They both ended around 11:45.  The market internals were stronger today than yesterday so the selling did not take SPX down as far today.  It did get down below 2800 though.  Once the selling stopped the market rebounded through the afternoon.  SPX is making lower highs and higher lows this week.  Price is tightening up for a bigger move.  We should get a day with a range expansion that should see some follow through at some point.

The futures remains trapped between the 20 and 100 SMAs.

The green count recrossed the red line.  We are getting a bit of a braided pattern indicating consolidation.  As we know consolidations can be either a pause to continue a move or a reversal pattern.  Which way will this one break?

The option data shows the strongest support at 270 and 275.  However, the number of puts is well lower than we usually saw before the Dec. meltdown.  The only call strike (potential resistance) worth mentioning is 285.  Even that level does not have a particularly large number of calls.  I guess the volatility explosion in Dec. has mellowed out the option sellers a bit.

SPX has had resistance at 2820 and support at 2800 this week.  It manages to penetrate those levels at times, but has been unable to stay there.  There were positive comments on the trade talks today which I think helped the market.  However, Kudlow also mentioned the talks could take months.  I would actually expect that if we were to get a good deal.  A quick deal with China will not be worth much to the U.S. in the long run.  I am also hearing more talk from people becoming concerned with the global economy.  At the moment that concern looks valid to me.  The U.S. while still plugging along is also slowing.  I am sure this is causing the hesitation by investors to run prices higher.


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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.