2/15 SPX, SPY, ES, QQQ Trade Plan
Are we ready for a selloff?
A hotter than expected CPI brought a lot of uncertainty to the market and today’s trading brought it chop and a very technical plan was needed to trade at key levels.
One callout while in the trade recap I had 4100 Gamma noted as a medium positive level acting as support I missed this in the bias levels. This would have been the first stop below 4125 that I should have noted. This proved to be critical as SPX held this 4100 level and began a rally from there. My trading partner reminded me in a critical time in the first 15 minutes and found a nice retest of 4115 to ride the trade to the highs. You can see this on Twitter here.
I enjoy interacting and learning from other traders so continue to share your trades, ideas, and how you use this trade plan by messaging me on Twitter @DarkMatterTrade.
News Catalyst
We have a couple of data points before market that could provide trend on intraday…
8:30am est - Retail Sales
8:30pm est - Empire State Manufacturing Index
For more information on these news events, visit the Economic Calendar
SPX/ES/SPY Notes:
Remember you can use this SPX trade plan to trade ES.
No major changes to any trendlines although we did hit the top of the orange wedge and immediately sold off. The key trendlines I am watching are:
Orange - From our recent highs you can see this trendline is a clear resistance to price above and a triangle/wedge has formed where I can see price ping pong before CPI and post CPI waiting for a breakout up or down
Purple - This trendline was broken at FOMC around 4093/95 and it’s exactly where SPX bounced from today testing this breakout trendline and rallying from it
White - this is our trendline from the Covid 2020 low - while price broke below it, we were able to get back within it
SPX/ES/SPY Trade Plan:
Bullish bias:
Above 4150 target 4175
If there is a failed breakdown at 4115-4110 target 4125 then 4150
If there is a breakout at 4125 target 4150
Below 4115 target 4090
If there is a breakdown of 4080 target 4065
If there is a failed breakout at 4150 target 4125
If there is a breakdown of 4065 target 4000
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
Remember for price to go above spot through a magnet or repel VIX and IV must decrease. For price to go below spot through a magnet or repel VIX and IV must increase.
Above Spot:
4150 is a medium negative vanna - acting as repellent
4175 is a major negative vanna - acting as repellent
4200 is a major positive vanna - acting as magnet
4215 is a minor negative vanna - acting as repellent
4225 is a major negative vanna - acting as repellent
Below Spot:
4125/20 are minor positive vanna - acting as magnet
4115-4105 are minor negative vanna - acting as repellent
4100-4090 are minor positive vanna - acting as magnet
4085/80 are minor negative vanna - acting as repellent
4065 is a medium negative vanna - acting as repellent
4055 is a minor negative vanna - last one before a major selloff
4000 is a major positive vanna - acting as magnet
3975 is a medium negative vanna - acting as repellent
Our range could be 4090-4175
If 4065 breaks down, it targets 4000 and this is an area I would add size in puts
It’s a hard argument for the bulls to see upside above 4175
Gamma and Delta-Adjusted Gamma (DAG)
Above Spot:
4135 is a minor positive Gamma - acting as resistance
4140 is a minor positive Gamma - acting as resistance
4160 is a medium positive Gamma - acting as resistance
4170 is a minor positive Gamma - acting as resistance
4185 is a minor positive Gamma - acting as resistance
4200 is a MAJOR positive Gamma - acting as resistance
Below Spot:
4130-4125 are positive Gamma - acting as support
4115-4100 are positive Gamma - acting as support
4100 is a medium positive Gamma - acting as support
4080 is a medium positive Gamma - acting as support
4065 is a major positive Gamma - acting as support
3975 is a major positive Gamma - acting as support
4200 will be a major barrier to get past it and could bring us near the highs before a potential reversal
4065 is a major level and if lost takes us easily to 4000 then 3980
QQQ Trade Plan
Bullish bias:
Above 309 target 311
If there is a breakout at 314 target 318
If there is a failed breakdown at 301-300 target 304
Bearish bias:
Below 304 target 301
If there is a failed breakout at 308-309 target 304
If there is a breakdown of 300 target 296
Vanna:
Above Spot:
308-309 are minor negative vanna - acting as repellent
310 is a major positive vanna - acting as magnet
311-313 are minor negative vanna - acting as magnet
314-318 are positive vanna’s - acting as magnet
315 is a major positive vanna - acting as magnet
Below Spot:
305 is a minor positive vanna - acting as magnet
304 is a minor negative vanna - acting as repellent
301-300 are medium negative vanna - acting as repellent
299-296 are positive vanna - acting as magnet
295 is a medium negative vanna - acting as repellent
Gamma:
Above Spot:
306 is a minor positive Gamma - acting as resistance
310 is a major positive Gamma - acting as resistance
314-318 are positive Gamma - acting as resistance
Below Spot:
304 is minor positive Gamma - acting as support
301 are positive Gamma - acting as support
300 is a major positive Gamma - acting as support
295/294 are minor positive Gamma - acting as support
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
I always stick to two EMA’s on my chart and that’s the 10/50 EMA’s
When the 10ema is above 50ema we are bullish
When the 10ema is below the 50ema we are bearish
Go put these on your charts and when you view them on timeframes less than the daily timeframe you will see the power they provide
For scalpers out there the smaller timeframes provide great opportunities to scalp 5-10pt moves
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.
Trading is not for the unprepared. It is critical you abide to a strategy and checklist and walk into every trade with a plan. Without a plan you are simply gambling and have a better chance at the slot machines. There are more nuances to my weekly and daily checklists, but I think this provides a good read for now and we will/can continue adding to it.
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.