2016/03/21 SPY Options Wrap Up

Outlook

We expect bears trying to sell at the high while the market is clearly overbought, but the pullback will be very shallow. SPY might undercut 5SMA where buyers would show up.

SPY today

SPY 5m

Bears were rejected in early morning but buyers weren't so active either. Price range was very narrow while rising 5SMA is approaching from below.

CVI/STVO/VTO and trends/overbought/oversold

$SPX CVI

$SPX STVO

$SPX VTO

CVI and STVO dropped a bit. CVI suggests neutral in very short term.
VTO is still in overbought territory while ITBM/ITVM still rising.
Those suggest there might be very shallow pullback in coming days.

SPY Options OI and Dollar Weighted Ratio

SPY 03/24 OI

SPY 03/24 DWV & Bull/Bear Ratio

There still exists SPY 205/206 walls which work as resistance.

By the way, we added Bull/Bear ratio chart in DWV menu.

Bull/Bear Ratio = Bullish / (Bullish+Bearish)

where

Bullish=(DWV of Call Above Ask+DWV of Put Below Bid)

Bearish=(DWV of Put Above Ask+DWV of Call Below Bid)

I will describe how to use this indicator in separate entry. Wait... I haven't written any manual of my App...

2016/03/18 SPY Options Wrap Up

Outlook

Coming Friday is Good Friday. (Are others bad ones by the way?) That means we will have short trading week. Strong close at triple witch, overbought market, and short trading week are not favorable for bulls. SPY may test rising 5SMA this week and such shallow pullback would be healthy for sustainable uptrend.

SPY today

SPY 5m

It looks like SPY had already *pinned* on Thursday except the fact it was ex-dividends day. 0318SPY205.00C got worthless as we warned previously.

CVI/STVO/VTO and trends/overbought/oversold

$SPX CVI

$SPX STVO

$SPX VTO

All of CVI, STVO, and VTO stayed at overbought level. The market might be ready for pullback but the level would be very shallow.

SPY Options OI and Dollar Weighted Volume

SPY OI 03/24

SPY DWV 03/24

There are spikes at 205/206 Call on Mar 24. After this steep run up and overbought territory, it would be a strong resistance area for SPY.

2016/03/17 SPY Options Wrap Up

Outlook

We are still bullish but we can also see the market is getting tired. We expect bears would try the market down but 5SMA will work as strong support.

SPY today

SPY 5m

SPY continued climbing up tomorrow but there was clear negative divergence. Negative divergence doesn't lead the market down, rather it suggests the market is getting fatigue. The 5SMA is still rising and SPY is hovering over its 5SMA, so we don't need to short at this time.

CVI/STVO/VTO and trends/overbought/oversold

$SPX CVI

$SPX STVO

$SPX VTO

All of CVI, STVO, and VTO continued to rise. CVI and STVO still have a room for overbought. VTO looks overbought as it's approaching to +2σ, however, it was October 2011 when VTO crossed over +2σ and SPY basically stayed overbought after all.

SPY Options OI and Dollar Weighted Volume

SPY OI 03/18

SPY DWV 03/18

SPY DWV 03/24

SPY Options Big Trades 03/18

There was a big Call buying just before the close and it looks like someone opened ratio call spread, with long 9500x200.00C and short 19000x202.00C. Unless SPY sinks under 202 tomorrow, this trader is guaranteed to earn $475,000. Cool.

BTW it looks like SPY 0318 205.00C was very active today. Did those buyers know it is ex-dividend tonight? I hope they did.

2016/03/16 SPY Options Wrap Up

Outlook

We expected some turbulences after FOMC and it never happened. Anyways, our outlook is consistent from yesterday. The market will be grinding up.

SPY today

SPY 5m

There were some selling BEFORE FOMC and those bearish positions eventually fueled the rally after FOMC. I don't like to bet against those events, but trading style is vary...

CVI/STVO/VTO and trends/overbought/oversold

$SPX CVI

$SPX STVO

$SPX VTO

CVI and STVO suggest more upside near term and VTO suggests further rally in mid-term. It seems scary to go long from here but that's the way how the market works.

SPY Options OI and Dollar Weighted Volume

SPY OI 03/18

SPY DWV 03/18

SPY DWV 03/24

It looks like there were a lot of PUT buying before FOMC. Are those put holders going to close their positions before expirations? If so, those would be tailwind for SPY longs.

2016/03/15 SPY Options Wrap Up

Outlook

Our outlook is consistent from yesterday. FOMC might make some turbulences but the dip will be bought unless the sell off is very strong.

SPY today

SPY 5m

SPY gapped down a bit, then grinding up but couldn't close the gap. Volume was low bur SPY is still above rising 5SMA, which we think bullish.

CVI/STVO/VTO and trends/overbought/oversold

$SPX CVI

$SPX STVO

$SPX VTO

CVI suggests there is no momentum in very short term. STVO suggests $SPX is still bullish in short term. VTO is still overbought territory but we think $SPX could stay overbought as we explained yesterday.

SPY Options OI and Dollar Weighted Volume

SPY OI 03/18

SPY DWV 03/18

SPY DWV 03/24

SPY  Big Option Trades

There were relatively big Put trades between 12:22:55 and 12:34:38. As you can see the trade records, those would be put ratio spread where 205 leg is short and 202 leg is long. This is slightly bullish position where SPY 204ish is max profit, 205 and higher is limited profit, and below 202 is unlimited risk. If SPY goes under 202 by Friday, this trader has to sell SPY for delta hedging, but the magnitude would be limited because of the size of position.

Anyways, it's always fun to watch such weird option positions, don't you guys think so?

2016/03/14 SPY Options Wrap Up

Outlook

There will be some turbulence after FOMC but we believe dip buyers will show up eventually. Please note this coming Thursday is SPY dividends day. I remember March dividends week is usually bullish.

SPY today

SPY 5m

SPY gapped down a bit, then grinding up with little sell off at close and ended flat. It was sorta boring market so I should have enjoyed National Napping Day :)

CVI/STVO/VTO and trends/overbought/oversold

$SPX CVI

$SPX STVO

$SPX VTO

CVI and STVO suggest there will be consolidation for a while. VTO suggests mid-term overbought, but we know market can stay overbought longer than Bernie Sanders' speech. If SPY dips after FOMC, it could be a big opportunity for long entry.

SPY Options OI and Dollar Weighted Volume

SPY OI 03/18

SPY DWV 03/18

SPY DWV 03/24

Meh. No edge on today's DWV.

2016/03/08 SPY Options Wrap Up

Overview

SPY is testing 5SMA level as support.

Notice the volume spike at the close. We think this is a bullish development.

SPY Options

SPY OI 03/11

There were huge 198.50C buying yesterday but it looks like that trade was BTC of call seller. Now OI is skewed to put side and 198 will work as support.

SPY DWV 03/11

SPY DWV 03/18

We don't see any edge in Dollar Weighted Volume today.