What SPY Open Interest Suggests for the Coming Week

Last week here I discussed that it was monthly OPEX and thus, the obvious pin which was way below price would likely fail. I also said that should price fall back to SPY 256 it was likely a good buy opportunity (that information was not based on the open interest, but technical analysis). Price got to 276.18 on Tuesday and indeed it was a good buying opportunity.

If you have not yet subscribed to my weekly freebie you can do so below to get next weeks free trade idea sent to your mailbox Monday morning. Last week I outlined a trade for AAPL which did work, but was dependent on how you traded it and how long you held it. To be fair since it wasn’t a slam dunk I will call that a scratch. So far the weekly freebie record then is 4 for 5 wins and 1 that didn’t trigger and 1 scratch.

Open Interest:

SPY-W (51 of 71 pins since Wednesday expiration inception): The current best pin is 280 with not much call resistance above that level and put support that begins at 277 and continues at 276 and 273. A dip early in the week to 277 would be a buy opportunity since price very likely closes over that level by end of the day Wednesday. 

SPY-F: (43 of 65 pins since I began tracking Friday’s). The Friday expiration is very different from Wednesday in that it is more bearish with the highest calls being at 280. If price can stay over 280 all week then it’s not worth fighting; however, if price hangs around 280 or below during the week then it’s unlikely to close over 280 at Friday expiration. If price falls under the 278 calls then those might act as resistance as well, but they aren’t very high at the moment. There is some put support at 276/277, but again those aren’t yet very strong.

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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 1/17: Failed pin. Based on the way I determine pinnings this would have been successful because I clearly state if price opens way above high calls (in this case the 276 calls) then price is unlikely to fall below it. However, I like to stray on the conservative side and thus, will call it a fail. 

Friday 1/19: As expected for OPEX with price way above the best pin, this was also a fail.

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