August 16, 2023 SPX, SPY, ES Trade Plan

Last Trading Session Recap

What a difference a day makes right? We had news break overnight on China’s economy slowing down further with retail sales down, low youth employment, all around not a great outlook for China’s economy. Clearly as you can see in the stock market heatmap every sector experienced a selloff with only a handful of tickers maintaining a green day.

8/15 Stock Market Heatmap - All around red/risk off market conditions

In our trade plan we said…

Bulls want to keep price above 4485. As along as they do target 4505 then 4515. If we breakout of 4515 target 4525. If VIX continues to sell above 4530 targets 4545.

Bears want price below 4485, but they must defend 4500 as well. Below 4485 targets 4470. If there is a breakdown of 4465 target 4440.

Again, we opened in the middle of our first breakdown where SPX opened at 4474 below our bearish bias of 4485. Again, I don’t trade when we are in the middle of a targeted move from our plan, instead we wait paytiently for the next trade idea which was a break of 4465 target 4440. Once we broke 4465 we never got above it only getting as high as 4462 where afterwards we saw a complete collapse of SPX going as low as 4432 before it found support and closed at 4437.

Are we safe and time for a rally? Probably not…the bears closing this below 4450 is not good news for the bulls. Ultimately, it feels like price wants to target some of the lows we discussed in our Sunday plan - link below.

August 14, 2023 SPX, SPY, ES Trade Plan

Our trade idea on ADBE nicely hit targeting 517.5 before finding support at 516. NFLX gapped down hitting near the key level of 420 where it held and rallied back to 428 with no strength only to selloff back towards 423. These two tickers seem to be basing and getting ready for its next leg. Will be keeping a close eye on these tickers and Volland data for potential swing ideas. Don’t think we are there quite yet…

Oh yea, tomorrow could bring more volatility with FOMC Meeting Minutes out at 2pm est. I also would pay close attention to premarket news on Building Permits and Industrial Production - a leading indicator of inflation.

With that let’s jump into the trade plan.

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

With FOMC we can see fake breakouts and breakdowns and quick reversals. So be paytient let candles close and then react.

If I am bullish I am waiting for price to go above 4450 targeting 4465. Continued trend above would take us to 4480.

For the bears you want to keep price below 4450 to target 4390 with hawkish FOMC Minutes as your driver.

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ADBE

It’s going through a period of accumulation and setting itself for the next leg. The stock has broken from a falling wedge - bullish - but we could test this wedge again.

I think the best way to trade ADBE is on failed breakouts and breakdowns. If you take a look at the last session, 522.5 was negative vanna - it held at the open - and started to trade to our target of 517.5.

1. Above 525 target 530 then 535

2. Below 522.5 target 517.5 then 515 then 510

$ADBE Vanna view via Volland

$ADBE chart - overview of key orderblocks

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NFLX

420 is a major support level for NFLX. It is also in an area of accumulation and a bullish trend resurfaces as long as we hold above 415.

1. If there is a failed breakout of 427.5 target 422.5

2. Below 420 target 415

3. Above 420 target 427.5

$NFLX Vanna view via Volland

$NFLX chart - overview of key orderblocks

For intraday updates please follow me on Twitter @DarkMatterTrade.

News Catalyst

1. 8:30am est - Building Permits

2. 9:15am est - Industrial Production m/m

3. 2:00pm est - FOMC Meeting Minutes

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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8/16 - SPX/ES/SPY Trade Plan

Bullish bias:

1. Above 4450 target 4465

2. If there is a breakout of 4465 target 4480

3. If VIX continues to sell above 4480 targets 4495

Bearish bias:

1. Below 4440 target 4390

2. If there is a failed breakout of 4450 target 4390

3. If there is a breakdown of 4385 target 4370

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. 17pts 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. 4440-4450 - negative vanna

   1. 4455-4475 - negative DAG

      1. 4455 major

   2. 4438-4442 - 442.52-442.92 - $7.68B

   3. 4447-4454 - OB (30min chart)

      1. 4451 midline

   4. 4444-4453 - 443.15-444.02 - $8.98B

2. 4465 - negative vanna

   1. 4467-4470 - 445.67-446.66 - $14.4B

3. 4480 - negative vanna

   1. 4503-4522 - 449.03-450.89 - $24.68B

   2. 4477-4503 - OB (4hr chart)

      1. 4490 midline

   3. 4490-4527 - OB (2hr chart)

      1. 4509 midline

   4. 4523-4536 - OB (1hr chart)

      1. 4529 midline

4. 4495 - negative vanna

   1. 4500 - negative DAG - major

Below Spot:

1. 4435-4395 - negative DAG

   1. 4425 medium

   2. 4400 major

2. 4390 - negative vanna

   1. 4390 - positive DAG

   2. 4411-4385 - OB (4hr chart)

      1. 4398 midline

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

   4. 4393-4380 - OB (1hr, 2hr chart)

      1. 4387 midline

3. 4370 - negative vanna

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

4. 4360 - negative vanna

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Dark Pool Levels

We had a $2B print at the 448.07 level.

Above Spot:

1. 4438-4442 - 442.52-442.92 - $7.68B

2. 4444-4453 - 443.15-444.02 - $8.98B

3. 4467-4470 - 445.67-446.66 - $14.4B

4. 4503-4522 - 449.03-450.89 - $24.68B

5. 4534-4538 - 452.14-452.49 - $15.28B

6. 4554-4567 - 454.08-455.41 - $19B

7. 4577-4590 - 456.43-457.64 - $12.26B

Below Spot:

1. 4410-4393 - 439.74-438.06 - $22.02B

2. 4384-4375 - 437.18-436.20 - $22.33B

3. 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. 4447-4454 - OB (30min chart)

   1. 4451 midline

2. 4477-4503 - OB (4hr chart)

   1. 4490 midline

3. 4490-4527 - OB (2hr chart)

   1. 4509 midline

4. 4523-4536 - OB (1hr chart)

   1. 4529 midline

5. 4534-4540 - OB (30min chart)

   1. 4537 midline

6. 4572-4582 - OB (2hr, 4hr chart)

   1. 4577 midline

7. 4638-4660 - FVG (4hr chart)

8. 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. 4411-4385 - OB (4hr chart)

   1. 4398 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. 4440-4450 - negative vanna

2. 4465 - negative vanna

3. 4480 - negative vanna

4. 4495 - negative vanna

Below Spot:

1. 4390 - negative vanna

2. 4370 - negative vanna

3. 4360 - 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. 4445-4450 - positive DAG

2. 4455-4475 - negative DAG

   1. 4455 major

3. 4480-4495 - positive DAG

4. 4500 - negative DAG - major

Below Spot:

1. 4435-4395 - negative DAG

   1. 4425 medium

   2. 4400 major

2. 4390 - positive DAG

3. 4380 - positive DAG

Aggregate view of DAG 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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