S&P ETF (SPY) Short Setup

1 May

The market has had a fabulous run this year so far. There’s a saying though that goes something like “Sell in May and go away”.  I don’t know how true that is over the years, but the S&P 500 looks like a good short opportunity right now after today. The market’s advance seems to be stalling.

The S&P 500 technically has formed a double top chart pattern. On 4/11, the SPY ETF closed at 159.19 with a high of 159.71. Yesterday, 4/30, it put in a similar high at 159.72 and closed at 159.68. Today, the market sold off .88%. The stochastic is in oversold territory and the volume today was above average at 135.8 million shares traded. The closing price of the SPY ETF sits right at the 8 day moving average.

I decided to short 100 shares at 158.92 with a stop at 159.50.

Here is the daily chart showing a double top. I will add to this short if it continues down tomorrow.

The S&P 500 ETF showing a double top chart pattern.

The S&P 500 ETF showing a double top chart pattern.

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