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Monday, September 13, 2010

SPT Daily Chart w/Today's Intraday Prices

- SPY continues its rapid rise this morning. 11-day Linear Regression Slope is at 0.68 and Stochastic Oscillator is at overbought levels. Considering 113.2 was top of previous two high points, we could very well see SPY take a breather or even fall this week.
- This is Quadruple witching week, and many key economic indicators are going to be announced this week, as well. The markets are expecting these numbers to be supportive of the view that U.S. economy would not experience a double-dip recession.
- Conventional thinking would be that in expiration week with many economic indicators being announced, we could see volatile price movements. Since SPY implied vol is at 19 vs 19.8 value for EFV indicator, now may be an appropriate time to go long volatility. Well, unless economic numbers are much worse than expected, I don't see a significant move to the downside. If they are much better than expected, the rally may continue, but since SPY has come up so far, so quick, I do not see the violent move upwards either.
- I am going to remain long delta and NOT long volatility because my indicators are telling me to do so. But I am going to raise my stop/level to 110.0 and 108.9.

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