Joined Dec 4, 2012
319 Blog Posts

Hit Oversold This Afternoon on $SPY

My oversold indicator hit 29 on SPY. Once under 30 it is oversold. We like to wait for it to move higher back above 30.

We wait to buy when it moves back above 30. Why? Because there is good and bad oversold. Bad oversold is dropping below 30 and staying there. Good oversold is a quick drop under 30 and then a bounce back above. In the past, we have highlighted this indicator here and picked up some nice buy signals.

In my options service, I decided to front run this oversold condition today. Here is the trade idea. It was published a bit earlier near the low for the day.

We are going to play the S&P 500 via SPY. We will buy calls on the S&P 500 ETF (SPY) using the April $273.50 Call that is trading at $2.70. SPY is at $269.31.

There is no limit to this trade and the breakeven is $276.20 due for expiration April 20th.
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