June 10, 2016

At the close yesterday the SPY which is the S&P 500 ETF was at 212.37.  The Relative Strength Indicator was just north of 73.  When the RSI approaches 70 that means that the market is over bought.  When the RSI is approaching 30 that means the market is oversold.  Well yesterday the market was making recent highs and the rsi was 73 so that tells me that their is more likely a down side opportunity than an upside.  I looked at the July 8th 212.50 Put.  When you buy a put you are speculating that the market is going to go lower.  If you are wrong and it goes higher you risk losing the total invest.  One contract cost 3.36.  Today the market is down slightly.  Time will tell if the RSI is correct or not but more times than not it is.



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