SPY Open Interest for Week Starting 12/4/17

Last week here I stated that if price were to open and hold above the high SPY calls of 260 next week to go with it and not fight it. If you did go with that then you were handsomely reward as SPY gained over 2% during the week. If you struggled to make gains last week or failed to notice the rotation you might want to consider joining my premium subscription discussed below. For educational purposes, below is what I wrote to members last weekend which details why we were anticipating the rotation that took place last week. 

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Open Interest:

SPY-W: (48 of 64 pins since Wednesday expiration inception).* Given the volatility last week, it’s no surprise that the open interest is all over the place. There really is no perfect pin here. There are both high puts and calls at 261 and some decent puts underneath so anything under 261 is likely a buy. There is also both calls and puts (but more calls) near 263 so if price doesn’t gap over that level on Monday then it could act as some resistance. Finally, there are the puts at 264 and calls at 265, which based on where price closed Friday could act as a magnet of sorts till after Wednesday expiration. With all that said, if we gap over 265 on Monday and it can hold over that level then go with it as opposed to fighting it.  

SPY-F: (40 of 58 pins since I began tracking Friday’s).* This one is much less complicated than Wednesday’s expiration. There is good put support at 260 and there is small call resistance at 265. If price is able to hold over that level then it’s a go with scenario. If it opens under 265 or can’t hold over it then those calls will likely begin to add up and become resistance. 

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Pinning stuff:

*An explanation as to how I define range pinning can be found here. More information about what pinning is can be found under the education section of my site.

Wednesday 11/29: Failed pin to the upside (this was the scenario I mentioned last week, which was to go with price if it held over 260). 

Friday 12/01: Successful pin. 

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