April 10, 2023 SPX, SPY, ES Trade Plan
CPI Week - Will we see a break in the range we are trading?
Good evening/day/morning traders. We have a few key news catalysts this week including new CPI numbers, FOMC members speaking throughout the week, and the beginning of the earning seasons with banks reporting on Friday.
Last session trading recap
The markets were closed on Friday, while futures open in the early morning. Post NFP numbers we did see a 20pt rally in the ES. Will that continue into tomorrow? Well let’s get to the plan and find out…
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
10:00am est - Final Wholesale Inventories
For more information on news events, visit the Economic Calendar
SPX/ES/SPY Trade Plan
Remember you can use this SPX trade plan to trade ES or SPY. ES value is approx. 27-30pts more than the SPX levels shared below.
Bullish bias:
Above 4110 target 4125
If there is a breakout of 4125 target 4140
If there is a failed breakdown of 4075 target 4090
Bearish bias:
Below 4100 target 4080
If there is a failed breakout of 4125-30 target 4105
If there is a failed breakout of 4140-45 target 4125
SPX - The Why Behind the Plan
Key Levels
Below Spot:
4085.68 - January VAH
4075 - positive gamma
4078.29 - 4/3 weekly VAL & 1/30 weekly POC
4070-4060 - FVG (1HR chart)
4060-4051 - FVG (2HR chart)
4045-55 - (403.63) - $6B has printed at this level
Above Spot:
4104-10 - (409.21 & 409.46) - Over $5.23B has been printed at this level
4105-15 - positive gamma
4122-30
4122 - $3B Dark pool printed at this level
4121-4134 - OB (1HR chart)
4125 - positive gamma
4130 - negative vanna
4135-4148 - OB (2HR chart)
4136.08 & 4136.58 - February’s naked POC and 2/13 weekly naked POC
4145.38 - 2/13 weekly VAH
4140 is largest negative vanna
4145 - positive gamma
Dark Pool Levels
We need to pay attention to some key levels that have Dark Pool buildup. Mark them on your chart as key levels that we should pay attention to. Note I combine my dark pool analysis Quant Data.
4122 - (411.02) - $3B printed at this level
4104-10 - (409.21 & 409.46) - Over $5.23B has been printed at this level
4045-55 - (403.63) - $6B has printed at this level
3950-70 - (395.62) - Over $8B has been printed at this zone
3910-15 - (390.11) a key dark pool level that kept the market supportive
Here is a summary chart from Quant Data that shows the key levels that have been bought up in dark pool prints since the beginning of March 1, 2023. Remember the levels where we see dark pool prints greater than $2B should peak our interest.
Orderblocks (OB) and Fair Value Gaps (FVG)
These are smart money concepts and some areas I am looking to see how price reacts. I will give higher credence to OB’s whereas FVG’s could be areas of basing/consolidation if they break.
Resistance levels - at these levels I want to see if price rejects to short or consolidates for a push up. I couple this data with Volland, intraday option flows, and Dark Pool levels. Higher timeframe OB’s or FVG will be harder to break. OB’s are the stronger levels over FVG’s.
4108-4119 - FVG (1HR chart)
4121-4134 - OB (1HR chart)
4135-4148 - OB (2HR chart)
4176-4200 - OB (2HR chart)
Support levels - at these levels I want to see if price rejects to long or consolidates for a push down. I couple this data with Volland, intraday option flows, and Dark Pool levels. Higher timeframe OB’s or FVG will be harder to break. OB’s are the stronger levels over FVG’s.
4097-4086 - FVG (1HR chart)
4070-4060 - FVG (1HR chart)
4060-4051 - FVG (2HR chart)
4047-4035 - OB (2HR chart)
4018-4007 - OB (1HR chart)
Volume Profile
Let’s review the volume profile and some key levels there. If you are unfamiliar with the Volume Profile I highly suggest reviewing some YouTube videos or reading this quick overview on it.
Some keywords to be aware of:
VAH = value area high
VAL = value area low
POC = point of control
A naked POC means it hasn’t been tested after it was formed - these will typically act as magnets
Key levels of interest:
Above Spot
4136.08 & 4136.58 - February’s naked POC and 2/13 weekly naked POC
4145.38 - 2/13 weekly VAH
4155.87 - 2/6 weekly VAH
4180.48 - February VAH
4214.14 - August VAH
Below Spot
4097.45 - 2/13 weekly VAL
4085.68 - January VAH
4078.29 - 4/3 weekly VAL & 1/30 weekly POC
4054.62 - February VAL
4051.18 - 3/27 naked POC
4016.92 - March VAH
Weekly Option Expected Move
SPX’s weekly option expected move is ~60.78 points. SPY’s expected move is ~7.64. Remember over 68% of the time price will resolve it self in this range by weeks end.
VIX Update
Let’s review the VIX chart. VIX hit the downward trendline we have been monitoring and it also closed below a key support line. This screams of the VIX further going down, but no prediction keep an eye on the key levels.
Above Spot:
18.52-19.12
20.46-21.06
Below Spot:
17.32-16.92
16.04-15.44
15.44-14.95
Remember, typically VIX going down correlates with a uptrend in the market and vice versa for a downtrend in the market.
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 repellent VIX and IV must decrease or stay flat. For price to go below spot through a magnet or repellent VIX and IV must increase.
Positive vanna - will act as magnet
Negative vanna - will act as repellent
When price goes through a positive or negative level it will flip it - ie negative becomes positive and vice versa.
Above Spot:
4110 - negative vanna
4115-4120 - positive vanna
4125-4140 - negative vanna
4140 is largest negative vanna
4145 - positive vanna
4150 - negative vanna
Below Spot:
4105-4080 - positive vanna
4100 is largest vanna
4075 - negative vanna
Gamma and Delta-Adjusted Gamma (DAG)
Positive Gamma Above Spot - acts as resistance
Positive Gamma Below Spot - acts as support
Above Spot:
4110-15 - positive gamma
4125 - positive gamma
4145 - positive gamma
4155 - positive gamma
Dealers must buy between 4130-4170
Below Spot:
4105-10 - positive gamma
4075 - positive gamma
Dealers must sell below 4090
Charm
Charm is negative on SPX. This suggests that Charm will have little a more bullish impact on SPX. Again this is an aggregate view of SPX - doesn’t guarantee 0DTE bullish bias.
When reviewing Charm we also need to account for SPY’s charm. It is leaning more bullish.
Final Take
I think this week will bring range bound action in the markets with the key catalyst not arriving until May’s FOMC. Until then we play the market level by level and take our profits when we can. Remember…10-20% profits on a daily basis is amazing. Never let a green trade go red unless you are managing your risks accordingly.
We have dark pool prints above now and below us. I will be curious to see if we see more dark pool prints if price goes up. Which could potentially lead us to testing 4200 and even 4300 in the markets - not 0DTE or even weekly - as the dark pool levels below spot continue to increase and act as support. When will these dark pools sell?
I look forward to seeing you all in the morning. 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, Quant Data 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.