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I was out of town last weekend hence no post. Luckily I returned in time to trade the Friday fun. SPX closed at a new high and is likely to see another new high at some point next week.

Open Interest:

SPY-W: (45 of 59 pins).* Currently the best pin is around 256, but it’s not very prominent and there isn’t much call resistance until 258 and then 260. Should SPY gap over the 258 level it increases the chances it will stay over those calls unless it fails to rally from there and instead drops back below those calls. SPY is unlikely to close over the 260 calls by expiration due to both the large call resistance and that it is a psychological round number. Should SPY get below 256 early next week then there is small put support at 255 and then again at 253. 

SPY-F: (36 of 53 pins).* The current best pin for Friday is 257, but again it’s not very prominent and there is a fairly wide range from 256 to 260 that would offer as a good pin (at least for now). There is put support starting at 256 that gets larger from 255 to 253. Should SPY fall below 256 it could lead to a fast move lower due to delta hedging; however, given that weakness in 2017 is bought up very quickly, any dip below those levels is likely a great buying opportunity as price likely closes over those high strike puts by expiration. The only exception to that is if price fell fast through those puts at the very end of the week. To the upside there is again high call resistance at 260 and thus, for now, that is again a spot that would need a lot of strength to get through and hold. 

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Pinning stuff:

*An explanation as to how I define pinning can be found here. More information about what pinning is can be found under the education section of my site.

Wednesday 10/25: Failed to the downside.

Friday 10/27: Successful pin.

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