2/10 SPX & ES Trade Plan
The bears are back, but for how long?
Hello fellow traders…what an amazing trend day we had after the open. Simply playing the key levels, waiting #paytiently allowed for multiple trades throughout the day.
For my ES 0.00%↑ traders all you had to do was lock and load those limit orders overnight and wake up to a very profitable trade as we saw the following trade plan come to fruition. I took a call overnight and woke up to a nice profit and closed my trade immediately at the open - details on Twitter here.
Above 4125 target 4150
Why did I take this trade? We held a key level towards the end of day multiple times - 4110. We had vanna repellent below and magnet above. There was a bullish orderblock on multiple timeframes. It’s important as a trader that your mindset and bias allows you to play both sides of the market - no emotions as a trader - you simply react to the levels and momentum.
A few of you have reached out to let me know that you trade futures and $ES using these $SPX levels which is great to hear. Please continue to share your trades, ideas, and how you use this trade plan by messaging me on Twitter @DarkMatterTrade.
For our $SPX and SPY 0.00%↑ traders when the markets opened we had 2 great trades. I will first say in my bearish bias I forgot to include idea #2 which was a failed breakout of 4150 target 4125. Rushed the trade plan last night, but regardless of that if you picked up on any of the Vanna, DAG data I share you would have known 4150 was a key level and if it was a failed breakout this was a short opportunity to head back towards 4125.
While I missed this trade as I was busy we had another great opportunity to short when 4125 broke down taking us through all of our targets before it stopped at 4070.
If there is a failed breakout at 4125 target 4115 then 4100 then 4085
I took this trade as well taking a 2/10 4080p from 11.20 to 15.80. This ended up going to a high of 24.80, but we can’t predict tops and bottoms. I was happy with my profits and gain, set a stop loss and walked away stress free.
Hope you all were able to take part and trade green. I would love to hear from those who did have a successful trade using the trade plan. If you did be sure to send a message on Twitter to me @DarkMatterTrade.
Let’s get into tomorrow’s trade plan.
News Catalyst
A few key catalysts most after market open…
2am est - UK GDP
10am est - Prelim UoM Consumer Sentiment
10am est - Prelim UoM Inflation Expectations
12:30pm est - FOMC Member Waller Speaks
4pm est - FOMC Member Harker Speaks
For more information on these news events, visit the Economic Calendar
Trade Plan:
Bulls were able to rally the market overnight bringing us back into the orange trendline it broke the previous day. We then broke that trendline along with the purple trendline broken after FOMC.
Bulls tried to break back above this FOMC level at 4093, but were rejected prior to market close.
Bullish bias:
Above 4085 target 4115
If there is a failed breakdown at 4065 target 4080
If there is a failed breakdown at 4040/50 target 4065 then 4080
Below 4065 target 4050/4045
If there is a breakdown of 4040 target 4025
If there is a failed breakout at 4075-4085 target 4065 then 4050
Vol.land Data
For a better understanding of the various greeks below I would suggest you visit the Volland YouTube Page. Volland provides unique data showing where dealers are positioned providing in my opinion a higher degree of conviction to where price may move to.
Vanna - Levels where price may repel or act as magnet
Above Spot:
4085 is a minor negative vanna - acting as repellent
4095-4115 is a cluster of positive vanna - acting as magnet
If IV decreases these levels will allow price to push up, but it will be a slow grind
4120 is a minor negative vanna - acting as repellent
If IV decreases this level will rip right through
4125 is a minor positive vanna - acting as magnet
4130-4180 is a cluster of negative vanna - acting as repellent
IV & $VIX need to decrease if we get to 4090 and want to push through the cluster of vanna’s at 4095 targeting 4115
Below Spot:
4080 and 4075 are minor negative vanna’s - acting as repellent
IV & $VIX need to increase in order to support this push down
4065 is a minor negative vanna - acting as repellent
Note that the size of this level decreased from yesterday reducing its impact as a repellent if IV increases
4070 is a minor positive vanna - acting as magnet
4040 is a minor negative vanna - acting as repellent
4020-3995 is a cluster of positive vanna - acting as magnet
4000 is a MAJOR positive vanna - acting as magnet
3975 is a major negative vanna - acting as repellent
IV & $VIX need to increase if we get to 4070 targeting 4050
Our range could be 4040-4130
Bulls must hold 4075 and 4065 for any potential reversal or push to the upside
Bears must break 4075 to target 4065 and then 4050
Delta-Adjusted Gamma (DAG)
Above Spot:
4085 is a minor positive DAG - acting as resistance
4100 is a major positive DAG - acting as resistance
4120 is a minor positive DAG - acting as resistance
4130-4180 is a cluster of positive DAG - acting as resistance
Above 4105 will trigger dealer buying pressure supporting price to 4115
Below Spot:
4065 is a major positive DAG - acting as support
Note the total value on this level decreased from yesterday reducing some impact as support
4040 is a minor positive DAG - acting as support
4025 is a minor positive DAG - acting as support
Price could rip through here if Vanna and Charm kick in targeting 4000 then 3975
Charm - which direction will dealers be moving price
Negative aggregate charm will push price to the upside - positive aggregate charm will push price to the downside
I am keeping the Charm analysis as I continue to review it and how to incorporate into this trade plan. Using the area below for documentation purposes.
2/7 Charm:
2/8 Charm:
2/9 Charm:
Final Take
Honestly this is a toss up. Momentum pushes us to the down side yet don’t be surprised if we get some momentum to rally us.
Stay #paytient and react to the key levels - no predictions! Good luck traders.
I am going to share my key rules to intraday trading in the end of the plan moving forward to build better habits and allowing you to grow as a better trader.
My Intraday Trading Rules
I do not trade within the first half hour UNLESS I am in a trade from the prior session and looking to close the trade or we have a major gap or a key level already broken - key level today would have been 4130 and 4150 and will explain below why these were important levels
I let the initial balance do its thing - I am just a small fish in a large ocean of traders so let's let them fight it out
I then wait for key levels targeting one level to the next and taking profits at each one.
If there are key levels that are 10pts apart that is when I have scalping mindset and anything above 10pts I want to give it the room to hit the price target with a 5 pt buffer to take profits once we reach within 5 pts of a target - I also tighten my stop loss once at 10-20% profit with the goal of never allowing trades to go red when I have a nice profit)
I supply options greeks with OB (order blocks) and FVG (fair value gaps) otherwise known as Smart Money Concepts
When I am scalping - ie targeting 10pt trade levels I will take profits and never go more than 10% red. Simple as that, know your trade plan strategy and the risk. When you are wrong you are wrong and reset
For 20pt trade level targets I will increase my stop losses to 20% and allow more of the trade to play in the event I entered too early
I try - key word try ha - avoid trading lunch hours defined as 12pm to 2 pm est. Money for the most part unless you are scalping - is made in the first 2 hours of the trading day and the last 2 hours
There are more we could discuss including volume profile, low volume nodes that I think are great strategies to compliment option greeks. Maybe in the future we can include more details.
To cover our basis…
Welcome to my Substack where I provide a daily SPX trading plan to help guide my intraday trading. The purpose of this letter is not to advice you on your trading or investment decisions. I am simply documenting my daily trading plan for myself to help with planning and execution. These are simply my opinions and the data sourced from the likes of vol.land, TradingView, Tradytics and others. The stock market is risky, gains are not guaranteed. This is not about getting rich quick, but learn to educate yourself and make the necessary financial decisions on your own. This is not financial advice.