SPX Daily Outlook 02/20/2020
Alert: Please note we are trading the monthly option today. Today’s SPX option is an a.m. settled not the normal p.m. settlement. Please notice the difference in symbol that we are trading, .spx NOT .spxw.
SPX Market Forecast
Close of the day for SPX should be below 3381
1st Target low 3371
2nd Target low 3364
3rd Target low 3357
These are the key levels we will be watching in our trading today.
SPX Trading Strategy
We plan to Buy to Open .SPX200221P3375 (SPX Monthly Option: put, Strike: 3375 Expiration: 02/21/20) at limit price of 8 *please note trading guidelines below.
We will be looking for about a 90% profit and using about a 75% stop along with using our target price levels. Please see our website www.spxoptiontrader.com for further information on our trading guidelines.
SPY Market Forecast
Close of the day for SPY should be below 338
1st Target low 337.25
2nd Target low 336.5
3rd Target low 335.75
SPY Trading Strategy
We plan to Buy to Open .SPY200221P337 (SPY Monthly Option: put, Strike: 337 Expiration: 02/21/20) at limit price of 1 *please note trading guidelines below
We will be looking for about a 50% profit and using about a 65% stop along with using our target price levels. Please see our website www.spxoptiontrader.com for further information on our trading guidelines.
Trading Guidelines
We normally wait till 9:35 a.m. EST to enter our trade, and most often enter the trade at a much lower price than our limit shared above. If market is moving fast in the right direction and approaching our limit, we normally enter the trade early. If the market is clearly heading in the opposite direction of our forecast, we will often delay entry until it turns. We will not enter any trade after 10:00 a.m. EST. Each trader must pick their own exits based on risk tolerance and market conditions. We often employ a trailing stop when our profit goals are hit or price targets are reached.
We use these levels as guidelines for our exit strategy. Once a level is hit, we watch very carefully and will often exit if market starts to reverse course off of these levels.
Our percentage stops and targets are guidelines for our trading. If the stop is near a level of support/resistance we will most often give it a little room. Also be aware that the market has a tendency to close the gap. This means that often it will move towards the previous day’s close and that can be a very strong support/resistance line. So be aware of the previous day’s close and any support/resistance levels by looking at 15 min chart for past 5 days.
Possible Support/Resistance Levels
Possible SPX support/resistance levels: 3383, 3388, 3397, 3404
Possible SPY support/resistance levels: 338.25, 339, 339.5, 340
Make it a profitable day!
SPX Option Trader