The S&P500 and SPY are both above the zero gamma levels 2883 and 286 respectively, adding more positive gamma as States reopen their collective economies. In addition, the number of stocks advancing is increasing. Momentum is building and breadth is improving each trading day.
Summary
Advancing/Declining Stocks
NYAD measures advancing versus declining issues on an index of approximately 2,800 companies. Adding a model to our system like the chart below gives us a quick read of the markets.
We’re out of the “red-zone” so we’re bullish. More stocks are advancing, so we have a better edge at the moment. In addition, trading our 21d strategy gives us additional supportive signals.
It should be no surprise that all of our indicators and signals are quick references to bullish or bearish signals. Everything is built on quick reference, in addition to key numbers.
S&P500 and SPY 2883 / 286
These key numbers/levels are zero gamma levels for the S&P 500 and SPY respectively. Their significance is quickly understood when the momentum starts to pick up once prices transition above them.
This morning SPY and S&P500 will open above both key levels. This means market makers, dealers, and institutions are more supportive of pullbacks. The market begins to “trend” when gamma is positive. It flipped to negative after the February 24 gap down.
Next resistance levels are the 200d overhead, 301 for SPY, and 3007 for the S&P 500. Plan accordingly and then join us today in the trading room for our LIVESTREAM broadcast
during market hours, as we navigate the current environment. Watch, listen and trade from 9:20 AM to 4:15 PM Monday through Friday.
Happy Trading,
Vinny
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*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities.
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These mentions are stocks that we may or may not decide to trade as outlined in the watchlist. Always use a stop.