Retail sales will set the tone early tomorrow followed by consumer sentiment, but it’s the close that I’ll be watching. Will the recent bullishness, suggesting a gap fill of 2/3 in the $SPY hold going into a three day weekend? Combine that with option expiration next week and all the geopolitical events occurring and there’s definitely cause for indecision on the bulls part to hold or lock in some profits.

Hard to believe it was only a week ago that the SPY looked to be headed for a test of the 200MA and then bam! The 13EMA is what I’m watching to see if it will be defended again by the sellers as it was on both the 2nd and 3rd of February. If tomorrow’s close is above that (108.36) then a gap fill becomes almost a lock for me. I’ve been short the Feb 1025/1015 put spread and the 1215/1225 call spread in $SPX for nearly 4 weeks now and have watched that like a hawk lately. That’s not my favorite thing to do, and I’ve had to hedge it once this cycle thanks to the price action last Thursday and Friday.

As I look back at the Feb cycle I sold that spread on the 11th of January which just so happened to be near the highs. While I got a lot of premium for the calls, I did not take in much on the puts. Greed could have overcome me and I could have written closer to the money strikes, but I stuck with my system and it paid off. I’m looking to get a 7% return this month in the fund and that’s nice. Especially when you combine that with the 4% gain for the Jan cycle.