2/8 SPX Trade Plan

V Shape Rally - Time to Pack for Bears?

Hello traders and welcome to another trade plan. Before we get into tomorrow’s plan let’s recap today’s trade plan.

Key points:

1. 4135-4190 is a cluster of negative vanna - acting as repellent

2. 4125 is a minor positive vanna - acting as magnet

3. 4150 is a major negative vanna - acting as repellent

4. 4175 is a major negative vanna - acting as repellent

Now let’s dissect key points from the trade plan:

1. If there is a breakdown of 4100 target 4085

2. If there is a failed breakdown of 4100 target 4115

3. If there is a failed breakdown at 4115 target 4130 then 4150

We opened RTH (regular trading hours as defined as 9:30am est open to 4 pm est close) at 4102 went towards 4110 failing at 4107. Once we lost 4100 again we targeted 4095 held it and broke 4100 and rode a wave till we peaked at 4118.

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Before we continue understand a few key rules to my intraday strategy:

1. 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

   1. 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

   2. I then wait for key levels targeting one level to the next and taking profits at each one.

      1. 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)

2. I supply options greeks with OB (order blocks) and FVG (fair value gaps) otherwise known as Smart Money Concepts

3. 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

4. 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

5. 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.

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5min Chart of SPX from TradingView

Going back to the trade plan, the bearish bias in trade idea 1 above of our trade plan of going short at 4100 targeting 4085 would have been a bad trade. I bought puts overnight with a thesis that we would retest the lows of yesterday’s session and scalping for profits and cut them right near 4097 at the open. We never maintained a key amount of time below that 4100 level and each red candle on the 5min had low volume and when we did get below 4100 we were faced with immediate wicks.

If you took trade idea 2 from above you made a nice 15pt scalp taking profits at the first target and leaving runners with a stop loss at your preference.

If you took trade idea 3 you were handsomely rewarded and #paytiently waited. This is the trade you wait for and attack when it comes a potential 20 pt target with minimal fight between it. While 4135-4190 was a cluster of negative vanna’s and repelling those levels, the charm effect played a greater role pushing price up and acting as an accelerant through those clusters. IV and VIX also went down through these levels.

4150 was then our next key level. This is where you could have taken profit and left runners.

Rinse and repeat twice as we had a nice V shape trading day.

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.

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Trade Plan:

We once again held the key breakout of the wedge at 4093 (purple line). While we lost that bullish upward trend line this was indeed bullish as we quickly came back above that trendline. This is what do they say…bear bait.

I have updated the trendlines I am watching including the orange trendlines. The white trendline is from ATH (all time highs) - yes that line. The purple lines are multi-day trends.

Key trendlines on SPX - 2HR Chart via TradingView

Bullish bias:

1. Above 4175 target 4200 then 4215

2. If there is a failed breakdown at 4150 or 4155 target 4175 then 4200

3. If there is a failed breakdown of 4125 target 4150 then 4175

Bearish bias:

1. Below 4150 target 4130

2. If there is a failed breakout at 4160/65 or 4175 target 4150 then 4130

3. If there is a breakdown of 4130 target 4115

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News Catalyst

One news catalyst for the day…

1. 8:30am est - Unemployment Claims

Key earnings from Uber and CVS before the bell and Disney, Affirm, Robinhood and MGM Resorts all reporting after hours.

For more information on these news events, visit the Economic Calendar

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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:

1. 4175 is a major negative vanna - acting as repellent

2. 4200 is a major positive vanna - acting as magnet

3. 4205/10 are minor negative vanna’s - acting as repellent

4. 4215/20 are minor positive vanna’s - actng as magnet

5. 4225 is a minor negative vanna - acting as repellent

6. IV should decrease on the break of 4175 in order to get to 4200 and and further decrease to get to 4215

Below Spot:

1. 4160 is a minor positive vanna - acting as magnet

2. 4155-4130 are minor negative vanna’s - acting as repellent

3. 4125/20 are minor positive vanna’s - acting as magnet

4. 4110 is a minor negative vanna - acting as repellent

5. 4100 is a major negative vanna - acting as repellent

6. IV should increase on the break of 4150 in order to target 4125 and further increase to get to 4100

• Our range could be 4125-4200

• 4100 has flipped to negative vanna now becoming a repellent

• 4150 is no longer negative vanna, but there is now a cluster of them from 4155-4130

• 4200 is our largest positive vanna and will be a key level to target

• 4175 will be a key level to break for the bulls to target 4200

• 4150 will be a key level to break for the bulls to target 4125 (but this level is choppy, likely to set multiple traps, if trading scalp in this range or tighten stop losses while in profit

Vanna data from vol.land

Delta-Adjusted Gamma (DAG)

Above Spot:

1. 4165-4175 are positive DAG - acting as resistance

2. 4205 is the next positive DAG above 4175 - acting as resistance

3. Above 4195 will trigger dealer buying pressure supporting price above 4200 and potentially as swings

Below Spot:

1. 4155 is positive DAG - acting as support

2. 4145-4125 are positive DAG’s - acting as a cluster of support or chop if levels pass through it

3. Below 4165 will trigger dealer buying - thus the zone between 4165-4100 could be choppy and tough to break

• Below 4155 support comes in at 4145 then 4125

• Above 4175 and road is cleared to 4200

Delta Adjusted Gamma data from vol.land

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

As we look at the Charm data dealers are hedging more to the upside where we have more negative Charm levels and the largest levels are to the upside.

The total notional value of Charm is more negative than positive

Above 4175 will trigger bullish charm

Below 4150 will trigger bearish charm

Charm Data on weekly expiry’s from vol.land

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Final Take

I think we could have a small bounce - trapping bears- and continue to making new highs on the weekly. My key level on watch will be the break of 4175 to target 4200.

Stay #paytient and react to the key levels - no predictions! Good luck traders.

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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.

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