Disclaimer: This is not a recommendation to take a trade and is being provided for educational and informational purposes only. See the full disclaimer.
The S&P 500 has been grinding higher this week and made it up to new all time highs. The ATRts remains in a long state, but the market is now extended a bit beyond the standard deviation offset and there is not a valid trade for the Weekly Theta system.
Yesterday the SPX closed at 1987.01 and the SD offset level is down around 1973. In order for a trade to fit the parameters of the system, we would need to see a pretty significant pullback this morning. We’re a few hours ahead of the open as a write this and /ES futures are trading flat to slightly higher so it doesn’t seem likely that a pullback will take place, but anything is possible. There is some economic data being released this morning and that has the potential to move the market.
At this point, there is not a valid trade for the system because price is extended well beyond the SD offset. If price trades down below 1973, the system can take a trade. The reason the system uses the SD offset as a filter is to avoid situations where the market is over extended and has the potential for a sudden reversal.