Click on Chart to Enlarge
As a follow up to last post here is the updated hourly chart of SPY showing the lower peaks in the money flow index and a cross of the MFI below its moving average. This is a picture perfect indicator divergence to signal a top. Now it seems that stocks are still not ready just yet to decline, so it may take at least another to poke to higher highs before selling comes in.
At this point I have run several scan over the last few sessions, and based on similar moving average and technical indicator set-ups in the past, there is a very negative expectation for the next couple months. Buying a 2 month until expiration ATM put on SPY here has been a profitable play in similar set-ups over the last 20 years.
So again I like a short entry here with a stop 3-4% above the market based on some previous stats.
Check last post as a further indication of moving average signal to look for confirmation of a new downtrend possible.