Morning Session Highs Met With Selling
The SPU traded to 1507 on strong dealer buying before reversing under the key 1500 level. Weakness in the large cap techs has left traders looking for something to trigger the upside bias.
Much of the trade in today’s session has been based on option expiration happening this week. Arbs have been heavy players, and dealers have been acting on the long side the majority of the time. Historically, during the Missappropiately named Triple Withcing, Wednesday afternoons provide a strong upward bias that carries us into Thursday morning highs. Therefore, we are buyers. However, we will be cautious if we trade below 1488, and all bets on the long side will be off with any trades below 1479.
The pit is relatively quiet at this time, and our range for this morning is less than 1%. My advice is to take a long lunch and look for a pickup in the volatility in the final 90 minutes.