Oversold S&P Leads to SPY Trade

The broad market index has pushed into “very oversold” territory with two unclosed gaps overhead. Typically when this occurs, the market will experience a short-term bounce. The RSI (2) is reading 2.4 ad the (5) is sitting at 15.6 so I expect to see a short-term advance over the next few days. How long will the bounce last? Well, I do expect to see the gap from today close which means that a move to the $107.07 level should be reached. However, if that does occur over the next day or so I expect to see further declines so I would not be surprised that once I get out of my trade today (see below) I will most likely step back into another one that leans towards the short side of things. There were a few times today that I thought SPY would push higher to close the gap from today, but the bears stepped in each and every time at the $106.30 area.

I have also been looking at a few Iron Condor trades, but I will save my thoughts until a later date.

I hope all of you are having a wonderful start to the week and stay tuned for my newsletter tomorrow.

Until then have a wonderful night!

Kindest,

Andy