S&P 500 – Broad Market Perspective

The market has proven all doubters wrong repeatedly and conceivably could continue to beat up any bear out there, if the recent or not so recent trend is to serve as a precedent.  Having said that, there is merit to playing the odds, banking on some sort of mean reversion.   The weekly chart of the broad market (S&P500) looks interesting … @ 127.2 Fib extn. of the last significant down move, with a developing bearish divergence.   I’ll probably take a small position banking on a pull back.
Volatility is very low, making premium selling quite tough.  Could look at strategies such as bear put spread (debit spread), or a directional calendar/diagonal (also benefiting form a pop in volatility were it to occur) to the downside.


This entry was posted in Calendar, Diagonal, Divergence, Fibonacci, Indices, Misc. Setups, Options, SPX, Vertical Spread. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s