Andrew Crowder's  Instablog

Andrew Crowder
Send Message
Over the last few years I have worked diligently towards refining several of my favorite and most successful stock options strategies. My hard work and diligence have proven to be a success and now I want to share my ideas and strategies with a limited group of like-minded investors. My options... More
My company:
My blog:
Crowder Options
  • April 13th Gap Closes in SPY 0 comments
    Sep 21, 2010 9:02 PM

    The month of September has certainly not lived up to its historical billing as “the most bearish month for the market”. Since the gap up on 9/1 SPY has advanced 7.52%. However, the gains have been on the backs of very low volume. Couple this with what I have been stating over the past few trading days and you can see just how the probability of a short-term decline has increased dramatically.

    Seasonal weakness, extreme overbought readings and today’s close of the 5/13 gap at $114.73 had pushed the high-beta QQQQ to an RSI (2) reading to over 99.5. At the close the RSI (2) had moved to 79.6, but the RSI (3) and (5) remain in an overbought state with an 84.2 and 83.3, respectively.

    The close of the 5/13 gap was almost picture perfect as the SPY faded almost immediately after the gap closed.

    I now plan to use the $114.73 area as my of max pain or stop-loss. If the underlying SPY pushes through $115 with no problem given the recent short-term bearish indicators that have moved into the market then I will just have to concede to the bulls and move onto the next trade. As I always say, trading is a marathon and not a sprint.

    Disclosure: Short SPY.
Back To Andrew Crowder's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


More »

Latest Comments

Most Commented
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.