August 14, 2023 SPX, SPY, ES Trade Plan

Weekly Overview

Before we get into tomorrow’s trade plan - ES gaping up as of writing - we are at a pivotal leg of this rally that started in May. Do we continue to go down or will we find some bottom here? We are in a seasonality of higher than normal volatility so keep a close eye on the VIX. VIX goes up - market down and vice versa.

Looking at the data I think 4500 and 4525 will be key zones for the bulls to overtake in the near term and hold it. ES is trading near 4475-4480 SPX as of writing and ultimately I will be curious if this is where it finds resistance and we continue our seasonality downtrend that August typically presents.

Ultimately, I want to see a few key levels and how they react IF we get there and those are 4410, 4400, and 4385. I think this recent leg down on the SPX could find some bottom there, rally near 4500 and continue to chop in this zone until September’s OPEX. If we lose 4385 then 4350 is the next level of interest to see if the bulls defend it for an end of year rally. These are not 0DTE ideas nor weeklies even for that matter. I am simply sharing with you my opinion and potential path the SPX could take over the next 1-2 months.

Similarly, I would keep an eye on CL1 or Oil. As of writing it is trading at 82.90 and finding demand in this 82.75 area. If it continues to hold here this will be risk off for equities and Oil’s recent surge could add to a higher than expected August CPI come September. It could target 85-90.

VIX Seasonality

Seasonality trend of S&P Last Ten Pre-Election Years is bearish until 8/25 and then bottoming one more time in 9/29

With that let’s jump into the trade plan.

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SPX/SPY/ES Intraday Overview (TL;DR)

4475-4480 is the key area if you want to be bullish. Above it and you target 4495.

Bears want price below 4465, but more importantly to defend 4480. Price could bounce in between these levels tomorrow. If 4465 breaks or we close below it then 4440 comes.

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ADBE

I am looking to short any pops in this ticker above 510 and 515. First target is 505 followed by 502.5 - speed bump - and then 495. Remember vanna levels flip - positive to negative and so forth so be patient with your entry.

1. Below 510-515 target 505

2. If there is a breakdown of 505 target 495

$ADBE Vanna view via Volland

$ADBE chart - overview of key orderblocks and fair value gaps

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NFLX

420 is a big level on NFLX and if lost 415 comes fast. 440 and 435 are growing in resistance and are key pivots for bulls to change trend.

1. Below 428 target 420 - I want to see a failed breakout of 428

2. Above 428 target 435

$NFLX Vanna view via Volland

$NFLX chart - overview of key orderblocks and fair value gaps

For intraday updates please follow me on Twitter @DarkMatterTrade.

News Catalyst

No major news catalysts on the day, but I have eyes on earnings for HD, TGT, WMT, and DE this week.

We also have Core Retail Sales on Tuesday, followed by FOMC Meeting Minutes on Wednesday, and then end major news on Thursday with Unemployment Claims.

The most anticipated earnings releases scheduled for the week are Home Depot #HD, Target #TGT, Palo Alto Networks #PANW, which reports after the close on Friday, Walmart #WMT, Sea Limited #SE, Applied Materials #AMAT, Cisco #CSCO, GreenPower Motor #GP, ZIM Integrated Shipping #ZIM, and Nu Holdings #NU.

For more information on news events, visit the Economic Calendar

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8/14 - SPX/ES/SPY Trade Plan

Bullish bias:

1. Above 4480 target 4495

2. If there is a breakout of 4495 target 4515

Bearish bias:

1. Below 4465 target 4440

2. If there is a failed breakout of 4480 target 4465

3. If there is a breakdown of 4440 target 4425

As always keep an eye on Volland30, VOLD indicator, and the VIX for trend continuation or reversals.

Remember you can use this SPX trade plan to trade ES or SPY. ES value is approx. 16pts more than the SPX levels shared. To get SPY levels simply take the SPX levels and divide by 10.03.

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SPX - The Why Behind the Plan

Key Levels

Above Spot:

1. 4465-4480 - negative vanna

   1. 4477-4503 - OB (4hr chart)

      1. 4490 midline

   2. 4470-4467 - 446.65-445.67 - $16.88B

   3. 4465-4480 - positive DAG

2. 4495 - negative vanna

   1. 4490-4527 - OB (2hr chart)

      1. 4509 midline

   2. 4503-4522 - 450.89-449.03 - $24.68B

   3. 4485-4490 - negative DAG

   4. 4500 - negative DAG - major

3. 4515-4525 - negative vanna

   1. 4523-4536 - OB (1hr chart)

      1. 4529 midline

   2. 4534-4538 - 452.49-452.14 - $15.28B

4. 4535-4555 - negative vanna

   1. 4534-4540 - OB (30min chart)

      1. 4537 midline

   2. 4554-4567 - 455.41-454.08 - $19B

Below Spot:

1. 4440 - negative vanna

   1. 4453-4444 - 444.02-443.15 - $8.93B

   2. 4438 - 442.52 - $5.31B

   3. 4460-4445 - negative DAG

   4. 4440 - positive DAG

2. 4425-4416 - OB (30min, 1hr chart)

   1. 4421 midline

3. 4408-4399 - OB (2hr chart)

   1. 4404 midline

   2. 4410-4393 - 439.74-438.06 - $22.02B

   3. 4435-4395 - negative DAG

4. 4390 - negative vanna

   1. 4393-4380 - OB (1hr, 2hr chart)

      1. 4387 midline

5. 4380-4370 - negative vanna

   1. 4384-4375 - 437.18-436.20 - $22.33B

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Dark Pool Levels

Whales continue to target near the lows of 4465 where we had another $2B of dark pool printed on Friday.

Above Spot:

1. 4470-4467 - 446.65-445.67 - $16.88B

2. 4503-4522 - 450.89-449.03 - $24.68B

3. 4534-4538 - 452.49-452.14 - $15.28B

4. 4554-4567 - 455.41-454.08 - $19B

5. 4577-4590 - 457.64-456.43 - $12.26B

Below Spot:

1. 4453-4444 - 444.02-443.15 - $8.93B

2. 4438 - 442.52 - $5.31B

3. 4410-4393 - 439.74-438.06 - $22.02B

4. 4384-4375 - 437.18-436.20 - $22.33B

5. 4349-4344 - 433.65-433.19 - $12.14B

I get my dark pool levels from Quant Data.

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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. I use Sonarlab’s indicator on Tradingview to plot these.

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.

1. 4477-4503 - OB (4hr chart)

   1. 4490 midline

2. 4490-4527 - OB (2hr chart)

   1. 4509 midline

3. 4523-4536 - OB (1hr chart)

   1. 4529 midline

4. 4534-4540 - OB (30min chart)

   1. 4537 midline

5. 4572-4582 - OB (2hr, 4hr chart)

   1. 4577 midline

6. 4638-4660 - FVG (4hr chart)

7. 4652-4665 - OB (1hr, 2hr chart)

   1. 4658 midline

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.

1. 4425-4416 - OB (30min, 1hr chart)

   1. 4421 midline

2. 4408-4399 - OB (2hr chart)

   1. 4404 midline

3. 4393-4380 - OB (1hr, 2hr chart)

   1. 4387 midline

4. 4344-4328 - OB (2hr chart)

   1. 4336 midline

Green Fill: Bullish FVG’ or Demand - Green Outlines: OB’s or Demand; Blue Fill: Bearish FVG or Supply - Blue Outline: OB’s or Supply

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Weekly Option Expected Move

SPX’s weekly option expected move is ~65.79 points. SPY’s expected move is ~6.67. That puts us at 4529.85 to the upside and 4398.27 to the downside. For SPY these levels are 452.32 and 438.98.

Remember over 68% of the time price will resolve it self in this range by weeks end.

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Volland 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.

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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:

1. 4465-4480 - negative vanna

2. 4495 - negative vanna

3. 4515-4525 - negative vanna

4. 4535-4555 - negative vanna

Below Spot:

1. 4440 - negative vanna

2. 4390 - negative vanna

3. 4380-4370 - negative vanna

Aggregate view of Vanna via Volland

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Delta-Adjusted Gamma (DAG)

DAG represents where dealers may assist a move in the markets. Positive DAG and dealers are buying. Negative DAG and dealers are selling. The larger the value the more dealers are buying or selling.

Above Spot:

1. 4465-4480 - positive DAG

2. 4485-4490 - negative DAG

3. 4500 - negative DAG - major

Below Spot:

1. 4460-4445 - negative DAG

2. 4440 - positive DAG

3. 4435-4395 - negative DAG

   1. 4400 major

Aggregate view of DAG via Volland

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Charm

Remember if IV is not expanding Charm will start to overtake Vanna especially 0DTE as it comes closer to expiration.

For all expiry’s, Charm total notional value is bullish - negative is bullish and positive bearish - take the total of the far left and far right values. This is a longer term view of the market and suggests we find key dips to buy to long.

What I am interested in looking at though is the current composition of the 0DTE charm where this greek closer to expiry has the biggest impact. Looking at this it seems it is anti-gex with a target of 4440 where it would find balance.

This could change with pre-market data so we need to wait until new 0DTE data comes from Volland.

0DTE view of Charm via Volland

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My Intraday Trading Rules

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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, 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.

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