NEW DIRECTIONAL PUT PLAYS

SPDR S&P 500 ETF - SPY - close 111.56 change +1.15 stop 113.55

Company Description:
SPDR S&P 500 ETF (the Trust), formerly SPDR Trust, Series 1, generally corresponds to the price and yield performance of the S&P 500 Index. The S&P 500 Index consists of 500 selected stocks, all of which are listed on the exchange, the NYSE or NASDAQ, and spans over 24 separate industry groups.

Target(s): 109.50, 108.60, 107.75
Key Support/Resistance Areas: 113.20, 111.65, 110.00, 109.50, 108.55
Time Frame: 1 to 2 weeks

Why We Like It:
SPY has rallied right into resistance and its 200-day SMA from below. This is a logical place for SPY to turn back lower towards its 50-day SMA. We are playing for a retracement which I think SPY will do prior to moving much higher. The bottom line is that SPY is need of healthy pullback before it can move much higher. I've chosen a stop of $113.55 which is above the June highs and the 100-day SMA.

Suggested Position: September $110.00 PUTS, current ask $3.25

Annotated chart:

Entry on July xx
Earnings: N/A (unconfirmed)
Average Daily Volume: 236 million
Listed on July 26, 2010