10/17/2008 Commentary

Options expiration today and max pain is quite a ways up for SPY. However, the chart prices will always come first. Just because it is options expiration does not mean that we can always count on an enormous move, although volatility is more likely than not.

I am watching SPY almost exclusively today. On my 10-minute chart, you can see the floor pivots (the green line is the pivot point, blue lines are resistance levels, and red lines are support levels). Indicator-wise, I think it would be constructive for the RSI to pull back into the area marked as "Bullish Support". A pullback to that level coinciding with an area of support on the price would be good provided it holds. On the stochs, the 14,3 would do something similar (a pullback somewhere between 40 - 60 to find support).

The futures on any normal day in a normal environment would seem significantly down. However, in this trading environment, they are not down in an unusual way. We will see what the day brings.