2016/05/17 SPY Options Wrap Up

Outlook

SPY once again broke 50SMA and bears are arguing another H&S pattern. Our view is still bullish and we expect SPY would hit double bottom here and recover 5SMA (206 to 206.5 level) by Friday expiration.

SPY today

SPY 5m

A bear trap might be the best bull trap. While it is possible today's action was bull trap, there was obvious positive divergence in last hours.

$NYAD

$NYHL

SPY:RSP

$NYAD showed some positive divergence against $SPX today.

$SPX CVI

$SPX STVO

$SPX VTO

• CVI and STVO declined hard and hit -1σ.
• VTO had little gain with declining ITBM/ITVM.

→CVI and STVO suggest $SPX is oversold in near term and we expect rebound tomorrow.

SPY DWV 05/20

SPY DWV 05/27

SPY Option Big Trades 05/20

There was a pretty big Put buying at 14:33. Someone bought 20000 of 0520 204P and paid $2M. We know it is almost always fail to buy Put at breakdown in oversold market.