SPX where are we now
June 10, 2008 by Daniel Beatty
The SPX is one of my favorite indices to trade credit spreads. When trading credit spreads it is very important to determine the support and resistance points of the index, in other words it is the stop point for your trade.
When playing conservative credit spread I play Bull Put Spreads using out of the money puts below the support line and when playing Bear Call Spreads I play out of the money calls above the resistance line. So lets take a technical look at the SPX.
The current chart shows the SPX in a bearish channel. The resistance line has a current value at 1400 and the support line is just below 1350. SO to play this index we would look for a bear call spread above 1400 and a bull put spread below 1325 or even 1300.
TO be honest always go with the market and at this time the market is in a bear trend, or a Bear Call Spread trade. So if you do play a Bull Put Spread you would place the trade well below the support line which if you follow the support line it would be at 1330; hence choosing a strike price for the sold put below 1325 or even 1300 would be my choice.
[...] are we going A couple days ago I talked about the SPX and it being in a bearish channel, SPX where are we now, and described the current conservative support and resistance [...]