Friday, September 9, 2016

SPY Trade Update

Regarding the recent SPY trade I outlined, when I provided the information I stated that exiting after 7 days was the highest expected value on the backtest.  I did not take into account Labor Day market closure when suggesting exiting at the close today/Friday.  So the 7th day would actually be this coming Monday's close.

Currently, the decline appears to have quite a bit of downside strength and has not yet had bullish divergences on any time frame 15 minutes or above.  So it seems most likely to me that there will be lower lows to come below this morning's lows.  I don't have an opinion on whether Monday will be an up or down session.  For those that are moderately skilled in technical analysis and are able to monitor the markets a bit, it seems sensible to use a SPY 15 minute chart with MACD and exit if/when there is a 15 minute bar that closes at a new low for the decline, but the MACD lines are not at a new low.

But for the simple/safe method, the past stats indicate an exit at tomorrow's close for the equity side of the trade.

For the SPY put option recommended, it would likely take another 3 points down in SPY before hitting the 100% profit target from my entry, though my entry was not outstanding, and the last several days had much better entry prices with gains already reaching or nearing 100%.

I am still maintaining my 100% profit limit order for possible exit of the trade.


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