Intra-Day Reversal Trading Ideas

Yesterday, the market surged but watch for an intra-day reversal to come soon. In addition the open interest for in the money index Calls is much greater than the open interest for in the money index Puts – as we showed in a post a couple days ago now. This means that traders could trickthe market by legging out of hedged positions on an intra-day basis.

As you can see in yesterdays SPY chart, each rally has ended with an intra-day reversal off of the new high. A day or two later, the market has a steep decline and that starts the slide. So for now we are staying slightly bullish and watching for that intra-day reversal.