August 18, 2023 SPX, SPY, ES Trade Plan

Last Trading Session Recap

When the stock market has clear trend days like this week has provided - as traders it is critical that we are able to take advantage of them and grow our bank with more arsenal to then trade with or pay ourselves.

Yesterday’s trade plan was another perfectly crafted plan guiding you to avoid any bullish bias as we opened to the upside and then nailing the lower end of our target.

This is what we said in yesterday’s plan:

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.

SPX’s high of the day was 4421 and its low was 4364. As you can see in the plan you had a 50pt+ range and trading day and had no heat on this trade just paytiently waiting. For those who didn’t trade the failed breakdown of 4425 we also stated the following in the trade plan:

1. Below 4410 target 4380

2. If there is a breakdown of 4380 target 4370

Congrats to all our traders on a successful day and continuing to add to our profits on what has been an amazing week. Tomorrow is Friday. So please if you are walking in with profits don’t be a hero and size accordingly managing risk. Don’t give your money back! If you are down on the week I highly suggest you review our trade plans from this week and learn from them…adjust your mental mindset and use the letters to sharpen your trading skills.

Our other trade ideas also played out beautifully. For ADBE we said:

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

We opened near 525 and immediately sold off targeting 510 before we bounced back towards 520 and sold off again towards 510.

Stock Market Heatmap was Risk Off for 8/17

With that let’s jump into the trade plan.

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

Quite a gap down on SPX and I am curious what it does at 4350 - hold it as resistance or reverse.

If we maintain price below 4350 we will target 4330. Bears will be quite happy and if they can apply more pressure and breakdown 4330 we target 4305.

For bulls I don’t know what to tell you, but look for reversals. If we hold 4330 we might get a 10-15 push targeting 4345. Otherwise, I would wait for any bounces to potentially short.

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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

For intraday updates please follow me on Twitter @DarkMatterTrade.

News Catalyst

No news catalyst on the day…

For more information on news events, visit the Economic Calendar

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8/18 - SPX/ES/SPY Trade Plan

Bullish bias:

1. If there is a failed breakdown of 4330 target 4345

Bearish bias:

1. Below 4360 target 4330

2. If there is a failed breakout of 4350 target 4330

3. If there is a breakdown of 4330 target 4305

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. 14pts 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. 4404-4411 - OB (30min chart)

   1. 4408 midline

   2. 4393-4410 - 438.06-439.72 - $25.04B

2. 4417-4435 - OB (1hr chart)

   1. 4426 midline

3. 4438-4447 - OB (30min chart)

   1. 4443 midline

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

Below Spot:

1. 4360 - negative vanna

   1. 4375-4362 - OB (1hr chart)

      1. 4369 midline

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

2. 4330 - negative vanna

   1. 4345-4328 - OB (1hr, 2hr, 4hr chart)

      1. 4336 midline

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

3. 4305 - negative vanna

   1. 4325-4292 - 431.26-427.92 - $18.46B

4. 4290 - negative vanna

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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. 4393-4410 - 438.06-439.72 - $25.04B

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

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

4. 4467-4470 - 445.67-446.66 - $14.4B

5. 4503-4522 - 449.03-450.89 - $24.68B

6. 4534-4538 - 452.14-452.49 - $15.28B

7. 4554-4567 - 454.08-455.41 - $19B

8. 4577-4590 - 456.43-457.64 - $12.26B

Below Spot:

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

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

3. 4325-4292 - 431.26-427.92 - $18.46B

4. 4214-4188 - 420.16-417.60 - $18.8B

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. 4404-4411 - OB (30min chart)

   1. 4408 midline

2. 4417-4435 - OB (1hr chart)

   1. 4426 midline

3. 4438-4447 - OB (30min chart)

   1. 4443 midline

4. 4473-4490 - OB (4hr chart)

   1. 4481 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. 4375-4362 - OB (1hr chart)

   1. 4369 midline

2. 4345-4328 - OB (1hr, 2hr, 4hr chart)

   1. 4336 midline

3. 4276-4263 - OB (4hr chart)

   1. 4270 midline

4. 4195-4166 - OB (4hr chart)

   1. 4181 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. 4395-4450 - negative vanna

   1. 4400 major

   2. 4425 medium

   3. 4450 major

Below Spot:

1. 4360 - negative vanna

2. 4330 - negative vanna

3. 4305 - negative vanna

4. 4290 - 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. 4375 - positive DAG

2. 4395-4435 - positive DAG

   1. 4400 major

3. 4460 - negative DAG

Below Spot:

1. 4360 - positive DAG

2. 4355-4310 - negative DAG

   1. 4350 major

3. 4305 - positive DAG

4. 4290 - 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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