SPY Technical Analysis and GEX Insights for Dec. 16 1. Technical Analysis (Daily & 1-Hour Timeframes)
Daily Chart (Longer Timeframe):
* Trend: SPY remains in an upward channel but is showing signs of exhaustion near the upper trendline.
* Resistance:
* 609–610: This is the upper channel resistance where price may face selling pressure.
* Support:
* 586.15: Immediate support level from previous consolidation.
* 580: A key zone to watch if selling accelerates.
* Indicators:
* MACD: Bearish divergence on the daily, signaling potential weakness.
1-Hour Chart (Shorter Timeframe):
* Trend: SPY is currently pulling back after rejecting a supply zone near 609.
* Resistance:
* 608–609: The major resistance area.
* Support:
* 602: Closest support level.
* 597.28: Critical support aligned with GEX levels.
* MACD: Bearish crossover, suggesting downside momentum in the short term.
2. GEX Analysis
Key GEX Levels:
* CALL Walls (Resistance):
* 606: 2nd CALL Wall, acting as significant resistance.
* 610: 3rd CALL Wall, the upper boundary of price action.
* PUT Walls (Support):
* 604: 2nd PUT Wall – current area of congestion and potential bounce zone.
* 600: Highest negative GEX, providing the strongest support below.
Options Oscillator Insights:
* IVR: 7.3% – Low implied volatility makes options cheap for directional trades.
* PUTs: 47.7% activity signals notable bearish positioning, adding downside risk.
3. Trade Setups
Bearish (Short Bias):
* Entry: Near rejection at 606–609 resistance.
* Target: First target at 602, extended target at 600 PUT support.
* Option Strategy:
* Buy PUT options (604 strike or ATM PUTs).
* Use a Bear Put Spread: Buy 605 PUT, Sell 600 PUT to reduce premium cost.
Bullish (Bounce Play):
* Entry: If SPY holds above 602–604 PUT Wall support with bullish volume confirmation.
* Target: 606–609 CALL resistance.
* Option Strategy:
* Buy CALL options (604 strike, 1-week out).
* Use a Bull Call Spread: Buy 603 CALL, Sell 608 CALL for a cheaper setup.
Directional Bias for This Week:
* SPY leans bearish in the short term if it fails to reclaim 606–609. Watch for a potential drop toward 602–600 PUT support.
* A bullish bounce could occur at 602 if volume confirms support strength.
Short Disclaimer:
This analysis is for educational purposes only and does not constitute financial advice. Always do your own research and manage your risk before trading.
