Traders…Focus your attention to the $SPX and /or the SPY 50 day moving average of 154.25 area. If the SPY closes under this once or twice this week or next week, we would assume the $DJI or DIA will have mass pain. Why?
Because the range in prices of the $DJI to the 50 day MA is 300 points at this posting. The Dow Jones will want to race down to test the $DJI 50 day in the same fashion as the $SPX / SPY.
So a trade for cash flow would be to short the DIA upon a SPY breach of the 50 day and watch the SPY or $SPX potentially fail and slide lower. If the SPY fails to hold under the 50 day levels the DIA short sale should be covered quickly. In other words, the SPY 50 day support held and we would not want to be short relative strength as the $SPX is on support.
Though this type of active trade is NOT part of the TradersThinkTank Trading system, it still offers a great risk:reward set -up for cash flow which, as many of you know, I still trade at times.