2/16 SPX, SPY, ES, QQQ Trade Plan
Are we ready for a selloff?
As I tweeted here - I took one trade today and this simply came down to waiting paytiently all day for the right setup and bringing the stop loss close as the trade panned out.
My thinking behind this trade is provided in the below screenshot. The key elements I want to stress:
The trade idea fit one of our trade ideas outlined in yesterday’s plan
If there is a breakout at 4125 target 4150
It fit the model of a failed breakdown of a key level - 4125
The 10ema overtook the 50ema - details on this in the screenshot and at the bottom of this letter outlining my trading strategy
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 catalysts premarket…
8:30am est - PPI
8:30am est - Philly Fed Manufacturing Index
8:30am est - Unemployment Claims
4pm est - FOMC Member Cook Speaks
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.
Orange - We finally brokeout of the Orange wedge we were watching. This is a potential bullish sign if the bulls can hold this wedge including a retest of it.
Purple - This trendline was broken at FOMC around 4093/95 and it’s exactly where SPX bounced from this week 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 4170
If there is a failed breakdown at 4140-4135 target 4150 then 4170
If there is a breakout at 4180 target 4200
Below 4130 target 4110
If there is a failed breakout at 4150-4155 target 4135 then 4110
If there is a breakdown of 4105 target 4085
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 minor negative vanna - acting as repellent
The size of this vanna has decreased
4165/70 are minor 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:
4145-4130 are a cluster of minor negative vanna’s - acting as repellent
4125-4115 are a cluster of minor positive vanna’s - acting as magnet
4110-4105 are minor negative vanna’s - acting as repellent
4100-4090 are a cluster of minor positive vanna’s - acting as magnet
4080 is a medium negative vanna - acting as repellent
4075 is a medium positive vanna - acting as magnet
4065 is a major negative vanna - acting as repellent
Our range could be 4115-4165
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:
4155-4160 are minor positive Gamma - acting as resistance
4180-4200 is a cluster of positive Gamma - acting as resistance
4200 is a MAJOR positive Gamma - acting as resistance
Below Spot:
4140-4125 is a cluster of positive Gamma - acting as support
4110 is a minor positive Gamma - acting as support
4085-80 are minor positive Gamma - acting as support
4065 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 312 target 315
If there is a failed breakdown at 308 target 312 then 315
If there is a breakout at 315 target 318
Bearish bias:
Below 308 target 304
If there is a failed breakout at 311-312 target 308 then 304
If there is a breakdown of 303 target 301
Vanna:
Above Spot:
310 is a medium positive vanna - acting as magnet
311-312 are minor negative vanna - acting as repellent
314-318 are positive vanna - acting as magnet
315 is a major positive vanna - acting as magnet
319-322 are minor negative vanna - acting as repellent
Below Spot:
308 is a minor negative vanna - acting as repellent
307-304 are minor positive vanna - acting as magnet
303 is a minor negative vanna - acting as repellent
300 is a major negative vanna - acting as repellent
Gamma:
Above Spot:
310 is a major positive Gamma - acting as resistance
315 is a major positive Gamma - acting as resistance
Below Spot:
304-303 are minor positive Gamma - acting as support
300 is a major 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
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.