2/7 SPY Trade Plan
Jpow!
Readers,
—2/6 Recap—
Today was…tough, we opened below 413, and we hit our downside targets way before the bell, we opened up right on the trendline and we pushed up to try and close the gap but sold off into the 408 area, I was looking for more downside but didnt get it. We then rallied back to fill yesterdays gap just to chop around the trend line.
Look where they pinned us (yes there is a candle there)! It can honestly go either way tomorrow so lets jump into it!
Vanna aggregate stayed the same with the addition of a small negative amount at 415. Looking at this we still think that the 413-418 area should act as resistance (do not blindly short these levels without taking in other factors)!
If we look at the vanna for just 2/7 we can see that we have a small cluster of positive vanna at 415/416 and stronger positive vanna below 410.
Vanna needs IV to be effective, the positive pull down will be stronger if VIX gets bullish, or they might try and pin us around 415/416.
In yesterday’s plan I said this:
And if we look at the chart with only the volume profile we can see that volume is starting to fill in down here. You can see that from 411-408 was filled with volume, and that the volume is still low under 408. Its a balancing act, until its not.
—2/7 Plan—
I think that the key area tomorrow is going to be 410-411.50 above here that opens the door to test Friday’s high, but we have lots of negative vanna above spot so for price to push up we will need VIX to stay around 18-17, I would target 415-416. If we open or bid below 410-411.50 I think that would lead to some more balancing to the downside, first target 408.50 then 406-405.
We also have our lovely friend Powell talking tomorrow at 12pm est so we need to be cautious. He will probably determine the rest of the session, and we could just chop around until then.
I still believe that 413-418 can be a harder area of resistance but thats not to say we cannot push up out of it. We have been on a steady climb up and we can continue to do so if the conditions are calling for it. Powell is a crap shoot. If he is hawkish tomorrow and VIX breaks out a little we can see a vanna pull to the downside. That is my thoughts going into tomorrow. Be safe out there.
Happy Trading,
—WICK—
Above 411.50 target 413 then 415/416
Below 410 target 408 the 406/405
To cover our basis…
Welcome to my Substack where I provide a daily SPY 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.