Over the past three days we’ve seen Bearish optionflow on SPY while it’s slowly been moving of the Monday low.
Put buying is decreasing a bit, and Call buying increasing a little, but the ratio is still bearish:
On a 30min chart you could start seeing a head and shoulders formation, but of course it isn’t one, until it breaks the headline.
Last bar of the day closed just below an entry that could be a start of a CD leg lower.
Zoom in on a 2min chart and we see a perfect XABCD pattern. SPY reached the PRZ just after the bell, and subsequently the ES has reversed about 5 points. Actually SPY reached the PRZ with a penny accuracy in After Hours. For PRZ calculation see the AB=CD tutorial, posted earlier today. Again Put buying into the close.
So for tomorrow we’ll have to watch this 207.5 PRZ. Below PRZ and watch the XA retrace levels, If it stays above we’ll watch if we see any new patterns forming.
Use the calculator and apply it to the same time frame on ES, and you’ll see how you could have calculated this PRZ in advance and anticipate a reversal.
FB. anticipated a run to or close to 110. Which we got today, after a short pullback, exactly as expected, and mentioned in yesterdays post.
Still holding 106 calls, traded some 110 calls, after it hit TD%F zone.
Even though Calls are still outpacing the Puts to a large degree, I see Put volume slowly increasing. On daily chart we have to observe that it is still trading within a Bearish PRZ, and TD-pressure on daily chart isn’t turning up yet. I’m going to be a little more careful. This could turn out to be a double top. Holding freebies. Hope some of you followed the last couple of days. So no reason to risk it. Going to watch this 30min chart, to see if we can get an entry below 108.59 and observe the upsloping trendline. This would be a perfect opportunity to let all those 108, 109, 110 Calls expire worthless by Friday.
If I change my mind based on something we see during the day tomorrow, I’ll tweet.
and last but not least, check out the visitor my daughter caught on her phone today in our front yard: