SPY Put Trade Returns 100% as SPY Approaches Our Downside Target
by Mike Paulenoff
April 12, 2014 • 1:00 AM EDT
On Tuesday (April 8), Mike added the April 11 SPY 184 Put to the MPTrader short-term portfolio at a price of $0.93. He was looking for the underlying SPY, which was trading at 184.49/50 at the time, to fall into the 181 area into expiration on Friday.
The SPY indeed fell to under 182.00 on Friday morning, pushing up the put price to $1.83, at which point Mike issued an exit alert for a 100% return on the trade.
Having broken key support between 183.75 and 183.60, locking in the Feb-April action as a top formation, the SPY has a next downside target of 178-176.
See chart below from Tuesday.
Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts on
ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international
markets, plus key ETF component stocks in sectors like technology, mining, and banking.
Sign up for a Free 15-day Trial!
More Top Calls From Mike
Ten days ago (on Nov 11), with Blink Charging Co. (BLNK) trading at 9.62 just ahead of its earnings report, Mike Paulenoff wrote in our his Trading Room:
"Is this [report] the catalyst that sends BLNK surging to and through multi-YEAR resistance at 14.50-15.00? It certainly could be because the huge base formation exhibited on my attached Daily chart shows that for the past 3-1/2 months, it has been digesting the gains from the March low at 1.25 to the July high at 14.
This past Tuesday November 10, Mike Paulenoff put out a chart on Southwestern Energy Company (SWN).
Pfizer (PFE) had just released its vaccine news the day before, and SWN was rallying along with other energy and industrial names.
As Mike noted, "Yesterday's vaccine news suggests the shift to economic normalcy might come sooner than later, and with it more aggregate demand to propel revenues and profits in the industrial sectors (value more than growth for a change).
A week ago Friday (Oct 30), with the equity markets and precious metals under intense pressure ahead of the forthcoming election, Mike Paulenoff told members of MPTrader:
"If there is one equity sector I think is imperative to participate in starting on Tuesday, well into the next Administration, regardless of who is in charge, it's the Precious Metal Miners in general, and in the (Junior) Silver Miners, in particular (SILJ).
This past Tuesday afternoon, with Zoom Video Communications (ZM) at $539.50, Mike Paulenoff told MPTrader members:
"ZM followed a very technical price path into its October high at 588.54, which my work argues ended the up-leg from the August low at 230.75...
In his MPTrader room this past Monday, Mike Paulenoff highlighted the upside potential in Grayscale Bitcoin Trust (GBTC).
With GBTC at 13.01, he wrote that it was "pushing up to test its prior rally peak at 13.03 (10/13), which if hurdled and sustained, will point GBTC towards another confrontation with its 14-month resistance zone between 14.20 and 14.70, where powerful upside potential could be unleashed."
By Wednesday GBTC reached as high as 14.49, and went on to hit a multi-month high of 14.
