August 17, 2023 SPX, SPY, ES Trade Plan

Last Trading Session Recap

Today was fun no? We had an initial pop on the market open and as we stated in yesterday’s plan 4450 was the key level bulls needed to break to get a bullish trend on the day. What was the high of day? It was at 4449.

I stuck to the trade plan and even on a day like FOMC if you have a trade plan and understand why 4450 would hold and be an entry point you can be profitable.

2 hours prior to the FOMC we had a selloff and it is here when I tweeted that 4420 would be a key level if we wanted more downside and hit near our target of 4390. This level held and held until the last hour where it finally broke and hit a low of 4404.

Overall a great trade plan and it provided us with a 45pt trade. Everyone should have been profitable today had they followed the trade plan.

ADBE did a full circle opening near 515 going to 522.5 where it found resistance and sold back off towards 515. Our trade plan called for below 522.5 target 515.

NFLX also hit our target of 415 where 425 held as resistance and we sold off the rest of the day gradually to 420 and where it broke to target 415.

This is why we do the trade plan, identify the key levels, wait for breakouts/breakdowns or failures of them and then react. There is no guessing game, data that backs our decision and key levels.

8/16 Stock Market Heatmap - Risk Off

With that let’s jump into the trade plan.

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

The area between 4410-4450 is chop city and will look to trap traders. Thus I want to see a failed breakout or a clear breakout of this area.

For the bulls it comes down to taking out 4425 to target 4440 and then 4450. High risk trade as we are in a clear down trend so keep risk mgmt in check.

For the bears they want price below 4425 to target 4380 with a potential overshoot to 4370.

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ADBE

Bears are pushing ADBE down with the rest of the market and 510 and 505 are key levels for it. If that breaks we begin our trek down to 495.

1. Above 515 target 522.5

2. Below 515 target 510 then 505

3. If there is a failed breakout of 522.5 or 525 target 510

4. If there is a failed breakdown of 505 or 510 target 515

$ADBE chart - overview of key orderblocks

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NFLX

420 is a key level the bulls need to retake. From there they can target 427.5. If we stay below or have a failed breakout of 420 we head towards 412.5 and then 410.

1. If there is a failed breakout of 417.5 or 420 target 412.5

2. Below 412.5 target 410

3. Above 420 target 427.5

$NFLX chart - overview of key orderblocks

For intraday updates please follow me on Twitter @DarkMatterTrade.

News Catalyst

1. 8:30am est - Unemployment Claims

2. 8:30am est - Philly Fed Manufacturing Index

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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8/17 - SPX/ES/SPY Trade Plan

Bullish bias:

1. Above 4425 target 4440 then 4450

2. If there is a breakout of 4450 target 4465

Bearish bias:

1. Below 4410 target 4380

2. If there is a failed breakout of 4425 target 4380

3. If there is a breakdown of 4380 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. 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. 4425 - negative vanna

   1. 4425 - positive DAG - dealer buying exhausts here

2. 4450 - negative vanna

   1. 4438-4447 - OB (30min chart)

      1. 4443 midline

   2. 4438-4443 - 442.52-442.98 - $9.81B

   3. 4444-4453 - 443.15-444.02 - $8.98B

3. 4465 - negative vanna

4. 4480 - negative vanna

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

      1. 4490 midline

   2. 4467-4470 - 445.67-446.66 - $14.4B

5. 4495 - negative vanna

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

      1. 4509 midline

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

Below Spot:

1. 4380 - negative vanna

   1. 4411-4385 - OB (4hr chart)

      1. 4398 midline

   2. 4410-4393 - 439.67-438.06 - $24.39B

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

      1. 4387 midline

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

2. 4370 - negative vanna

3. 4360 - negative vanna

4. 4345-4328 - OB (2hr chart)

   1. 4336 midline

   2. 4349-4344 - 433.65-433.19 - $12.14B

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Dark Pool Levels

We had a total of $2.13B print at the 4443 (442.98) level and $2.37B at the 4409 (439.64) level.

Above Spot:

1. 4438-4443 - 442.52-442.98 - $9.81B

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 - 439.67-438.06 - $24.39B

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. 4417-4435 - OB (30min chart)

   1. 4426 midline

2. 4438-4447 - OB (30min chart)

   1. 4443 midline

3. 4477-4503 - OB (4hr chart)

   1. 4490 midline

4. 4490-4527 - OB (2hr chart)

   1. 4509 midline

5. 4523-4536 - OB (1hr chart)

   1. 4529 midline

6. 4534-4540 - OB (30min chart)

   1. 4537 midline

7. 4572-4582 - OB (2hr, 4hr chart)

   1. 4577 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. 4411-4385 - OB (4hr chart)

   1. 4398 midline

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

   1. 4387 midline

3. 4345-4328 - 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. 4410-4450 - negative vanna

   1. 4425 major

   2. 4450 major

2. 4465 - negative vanna

3. 4480 - negative vanna

4. 4495 - negative vanna

Below Spot:

1. 4380 - 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. 4405-4450 - positive DAG

2. 4460 - negative DAG

3. 4475 - negative DAG

4. 4500 - negative DAG - medium

Below Spot:

1. 4400-4385 - negative DAG

   1. 4400 major

2. 4380 - positive DAG

3. 4370 - positive DAG

4. 4360 - 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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