Last week here we had three SPY expirations, but the most important one was Friday’s because it was monthly expiration. The Monday expiration pinned well, the Wednesday was so so, but the Friday one was what really affected price. SPY got as high as 280.41 last week and if you read my post you knew there was very high 280 calls for Friday’s expiration. Price almost always is rejected on a first touch of high calls and in this case it was a huge rejection sending SPY back down to the 275 area. How is that information helpful? One could have shorted the 280 level of course, but even if they had not, just knowing that tough resistance is there can save you from making the poor decision to get long.
If you have not yet subscribed to my weekly freebie you can do so below to get next weeks free trade idea sent to your mailbox Monday morning. Last week was GOOGL and it worked ONLY if you weren’t greedy. In the weekly freebie I laid out several targets. Two of those targets were hit the same day as the trigger and the following day. If you didn’t take profits then you ended up losing money on the trade. Targets are there for a reason, they are levels of resistance and a place to take some profit off the table.
In SassyOptions premium where it’s not just a trade idea, but comes with real time alerts we actually had some left over calls from the week before so it’s not a fair comparison – but that’s why I didn’t take the trigger. We ended up taking GOOGL calls from $2.60 to a high of to $21.20. Full disclosure, we did roll out to a new position (only using a small portion of profits) and lost money in the roll out position The stats for the weekly freebie since I began sending them are as follows:
- 9 wins (I only count wins when they are either big wins or where there was enough time to take profits).
- 1 that didn’t trigger
- 3 scratch trades
- 1 loss
Promotional stuff: If you are a short term trader and under performing or finding yourself on the wrong side of the market or overtrading join us at SassyOptions Premium or you are definitely missing out. Still plenty of time left to make 2018 amazing. Don’t miss out!
- Full premium service includes all day commentary, open interest and technical analysis on ‘in-play’ momentum stocks, and real time trade alerts through my exact entries and exists (meaning I can’t hide behind vague alerts without telling you what price I paid or sold at).
- Weekly Open Interest and Strategy Post – Open interest and technical analysis for how to trade AAPL, AMZN, BABA, FB, GS, GOOGL, NFLX, TSLA for this coming week. This does not include my private twitter, exact trades or any other updates.
Open Interest: If you want more information on how to read the high calls and puts in the open interest see here.
SPY-M: (2 of 3 for pins since Monday expiration inception).* The current best pin for Monday expiration is 275. If price can get and hold over both the 275 and 276 strikes then there isn’t much in the way of call resistance till 280. Below 275 there isn’t much put support till 272 and it’s very small support so the main support comes in at 270. In general this open interest would suggest a close on Monday between 272 and 275 unless it can demonstrate enough strength to push over the calls (or gap over and hold) or weakness to push past the puts.
SPY-W: (58 of 79 pins since Wednesday expiration inception).* Wednesday’s current open interest suggests price will remain under 277 as that is where the calls begin. Price would have to get through and hold over the 277 and 278 calls to have a chance to get to the high 281 calls. There isn’t much put support to the downside. There is a tiny bit at 273 and then not again till 268 to 270, but at the moment it isn’t high enough to be considered strong support. The current best pin is 275, but with so few puts it’s not very prominent and there is plenty of room to the downside should things get ugly. Because FOMC is on Wednesday there is a good chance this open interest will change prior to expiration and always remember hat news trumps the open interest.
SPY-F: (46 of 72 pins since I began tracking Friday’s).* Friday’s expiration also has a best pin of 275, but there is plenty of time for this to change and with the FOMC minutes on Wednesday it likely will. There is put support at 275 and 273, but the high and strong put support is at 272. Should price fall under there then there is put support again from 270 to 265. Should 270 break at the very end of the week it could lead to delta hedging and a quick move lower. With that said, at the moment it should be assumed that 272 would hold price up. To the upside there is call resistance from 277 to 281, but it’s not very high and a strong market (or news from FOMC) could easily push through those high calls. Again this open interest can change prior to Friday so make sure to check your open interest if I don’t post it to twitter.
Monday 3/12: Successful pin. It wasn’t exact, but it was close enough that if you based your strategy on a 278 pin then you made out ahead.Wednesday 3/14: Successful pin. There was no exact prefect pin here because some of the calls were under the high puts, but in general it fell within a good pin range.Friday 3/16: Successful pin. Up until literally the last minute of the day this was aligned perfectly to pin.