Short

SPY - Picking a Top

Updated

There's no telling how rapidly SPY will run out of steam and seriously correct. Short and intermediate trends continue pointed up. Two things lend to establishing put positions here. One is the Parabolic stop has triggered a sell this week. Also, volatility, as illustrated in the BB Band Width indicator is starting to decline. That generally indicates the start of some sideways movement as price reverts to the trend line.

The long term channel extension shows that a major leg down could complete next June at the 320 level. With all the apparent cross currents in the trend, I expect that the wave completion time would occur some months later however, the delay in completing the top only serves to lower the price target towards 300.

Eying a pilot position of SPY June 24 450-350 put spread. My premarket quotes show $17.56 - 17.94.

Note

A better trigger could occur next week as price will climb to test the three week high. Failure at this point could likely see prices fall to 430 into October. Perhaps I'll be looking at the October 445-435 put spread under 2.5 or less at the test of the high. Would also likely establish the June 24 position at this point.

Note

Interestingly, the last high close to 460, marked the convergence of three trend lines. Think it would be very important for a test of the recent highs in the next week or two. This could then define the current trend.

AssetDesign

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