June Trade

Currently I feel the market is due for a small recovering rally and then I think the market is going to sell off. When looking at the SPY chart, I think there is a good chance we could have a head and shoulders pattern starting to form. I think support will hold at 105 and we will move back up to the 112-115 level where we will sell off again and form the head and shoulder pattern. I'm not sure how long it will take, so rather than opening my normal credit spread, I have decided to purchase a June SPY 105 call and hold it for a couple weeks as we bounce off the 105 support. I will then look at opening a bearish credit spread as we get closer to the 115 resistance level.