SPY 0DTE Options Trade Plan 2025-03-18

Technical Analysis Synthesis

Price Position: SPY ($559.74) trades below all key EMAs on both 5-minute and daily charts. The 5-minute 10/50/200 EMAs slope downward, confirming near-term bearish momentum. Daily price is 6% below the 10-day EMA (567.07), reflecting sustained bearish pressure. RSI: 5-minute RSI (32.75) is oversold, but daily RSI (39.78) remains neutral-bearish. Bollinger Bands: Price hugs the lower band on the 5-minute chart (narrowing bands suggest consolidation), while the daily chart shows price well below the middle band (580.07), signaling bearish momentum. Support/Resistance: Immediate support at $559.34 (5-minute); a break could target daily support at $552.02. Resistance at $560.48 (5-minute) and $569.71 (daily).

Market Sentiment Integration

VIX: Falling to 21.56 (elevated but declining volatility). News Impact: Mixed sentiment—weak GDP Nowcast and dollar devaluation concerns offset by neutral EU headlines. Options Data: Max pain at $565.00 (0.94% above current price), but heavy put open interest at $555-$557 strikes suggests bearish hedging. Volume/Liquidity: Subdued volume across timeframes, indicating lack of conviction.

Directional Determination

Market Direction: Moderately Bearish

Supporting Factors: Sustained price below all key EMAs on both timeframes. Weak GDP data and dollar devaluation risks. High put OI at lower strikes ($555-$557). Conflicting Factor: Oversold 5-minute RSI raises risk of a short-term bounce.

Options Strategy Selection

Trade: Buy 0DTE SPY $555 Put

Premium: $0.31 (bid) - aligns with risk/reward parameters. Rationale: Targets downside toward daily support ($552.02) with favorable liquidity (OI: 8,230). Max pain ($565) is distant, reducing likelihood of a bullish reversal.