Stock recovered a bit from being grossly oversold, but with March expiration and quadruple witching day on Friday all bets are off as to what will happen tomorrow. We need to keep in eye on the SPY put spread in case prices sink on Friday.
SPY Position Update
SPY closed at $127.85 on Thursday - the overall March position is approx. $1,800 in the black
SPY is priced BELOW its current 14-day EMA (see SPY chart down below)
SPY is trading BELOW its 20-day Bollinger Band SMA (see SPY chart down below)
SPY is BELOW its 50-day simple moving average (see SPY chart)
SPY is still ABOVE its 200-day simple moving average (see SPY chart)
Relative Strength Indicator (RSI) is bearish (See SPY chart)
Moving Average Convergence/Divergence (MACD) is bearish (See SPY chart)
The February 7th Couch Potato published a March expiration month bull put spread
This put spread is approx. $200 in the black (see tables below)
$126 strike price short put delta is -.3022 (70% probability this position will be profitable)
The regular March option contracts expire tomorrow and we need the SPY price to remain above our $126 short put strike. The SPY dipped below the short strike price on Wednesday but ended the day higher and prices recovered a bit today. If the SPY price dips below the short strike tomorrow we will exit the trade immediately. Otherwise if the price gets close but doesn't breach (e.g. $126.50) then we will probably exit the trade for a few pennies prior to market close â€“ this will protect against any chance of aftermarket activity causing this trade to go bad.
Couch Potato Trader Disclaimer
All results reported in this section are hypothetical. While the numbers represented here may have been achieved or beaten by our readers, we make no representation that any individual investor achieved these exact results. The tracking for the plays listed in this section uses closing prices for the day the newsletter is published and it is not meant to imply that any reader actually received those prices (though many often do) or participated in these recommendations (even though many do). The portfolio represented here is hypothetical and for investment education purposes only. It is only an illustration of what type of gains a knowledgeable trader might receive utilizing these strategies. If you don't get close to these results, guess what. It isn't the fault of the strategies.