All Eyes on SPY 50 Day MA

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.

SPY Chart:

SPY capture-20130417-115203

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.

DIA chart:

DIA.capture-20130417-115340

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.

Nick Pirraglia

TradersThinkTank

About Nickolas Pirraglia

Nick Pirraglia started his career in trading in 1991 after returning to the US as an Army Officer deployed in Iraq. He began as a bond broker and worked his way into trading. Expert mentoring, hard work and a disciplined approach to the markets has allowed Nick the ability to maintain a very successful career in Capital Markets and Trading for over 20 years as a professional OTC Market Maker and independent trader. Nick has also managed the trading desks for a two Dallas based capital management companies and traded equities for a Dallas based hedge fund. Nick has trained and mentored thousands of customers in the rigors of trading, technical analysis and risk controls. Recently, Nick had broadened his market experience through the design and product management of two automated trading platforms. He has the pleasure of working with some of the brightest minds in the trading community and has collaborated with experts in data, design, engineering and trading psychology. An avid long distance runner, Nick completed several marathon events, qualified for the Boston marathon, completed several long distance Triathlons to include finishing a full Ironman triathlon.
This entry was posted in Trader and tagged , , , , , , , , , , . Bookmark the permalink.

One Response to All Eyes on SPY 50 Day MA

  1. Derek S says:

    Possible head and shoulders begining to form on daily charts? What do you think? Derek S.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s