There was a lot of speculation as to the notable lack of volume during the Tuesday trading session. Many subscribe to the thought that traders reduced their risk going into the debate. In any case, the S&P500remains between the 3200 – 3400 range going into October OPEX.
Summary
Futures dipped to 3491.00 (+/-) in overnight trading. That apparently fills the gap as futures dipped approximately 65 handles.
SPY 60 Minute
Given futures reaction overnight and the change of trend underway, we do note volume remains modest. That needs to change.
Support held at 322.00 (+/-). RSI needs to stay above 50.
SPY Daily
The key resistance for SPY is the 50d moving average. Without dealer participation, there is a risk of a sharp drop going into the elections. With this in mind, we intend to hedge our positions when warranted
“We don’t have [an abundance] “pre election” puts to cover and back vols are obviously not coming in. We therefore have fairly decent exposure to a sharp move lower and likely maintain that into elections.” spot gamma
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Happy Trading,
Vinny
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