The TEA has fired off a big warning on SPY – The first since May 8th. The current bullish move was confirmed about a month ago and held nicely with only moderate warnings on down days. In the context of slowing momentum and an extended move; yesterday’s bearish move is a more relevant warning.
Applications
- I’ll be quick to take losses on longs that aren’t working.
- I’m widening my neutral SPX options profile a little to make sure I can handle a 4% move with minimal draw down
- I’ll be holding shorts for as long as they want to work and taking profits on the first sign of a turn on the hourly
- The pull back is an opportunity to find individual names with relative strength – which can replace the ones that I cut.
Remember, the TEA Indicator is FREE for ThinkOrSwim and TradeStation. To receive a copy, send an email to [email protected] with the subject: TEA Indicator Request
-Andrew Falde
No Relevant Positions. Options Risk Disclaimer.
