August 22, 2023 SPX, SPY, ES Trade Plan

Last Trading Session Recap

We opened with a gap up and right at our bullish trade idea to go long above 4380 targeting 4395 and we got a second round of this trade when the bulls held above 4360 and then taking price as high as 4407 coming 3 pts shy of our second price target.

I had sent a this post and this post on X reminding how important 4385 was to hold otherwise we would close the gap and find balance around it and then head back towards 4380. Great 2 way action in the market today and nice range for us all to trade.

Stock Market Heatmap was Risk Off for 8/21

With that let’s jump into the trade plan.

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

The action is going to come down to whether the VIX contracts or expands. If we see further contraction in the VIX then the bullish case looks promising. If VIX expands bears will have a feast.

For the bulls you want to get price above 4405 to target 4420-4425. Break above 4425 target 4440.

For the bears you want to see price below 4390 to target 4370. A break of 4370 will trigger 4360 followed by 4345.

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ADBE

What a nice push up by the bulls who held the 510 level twice on the day while targeting the high of 522.50. I didn’t have a bullish idea so no trade here, but ultimately what happened is as IV/VIX contracted the negative vanna above spot helped push the move up breaking through all of the negative vanna.

Same exercise tomorrow for ADBE. If VIX contracts and as long as we hold above 515 we target 525 then 530. If IV expands any failed breakouts of 522.50 or 525 will be faced with resistance targeting 515.

1. Above 522.5 target 525 then 530

2. Below 520 target 515 then 512.5

3. If there is a failed breakout of 525 target 515

4. If there is a failed breakdown of 520 target 525

$ADBE chart - overview of key orderblocks

For intraday updates please follow me on Twitter @DarkMatterTrade.

News Catalyst

1. 10:00am est - Existing Home Sales

2. 10:00am est - Richmond Manufacturing Index

3. 2:30pm est - FOMC Member Goolsbee Speaks

4. 2:32pm est - FOMC Member Bowman Speaks

5. 3:30pm est - FOMC Member Goolsbee Speaks

For more information on news events, visit the Economic Calendar

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8/22 - SPX/ES/SPY Trade Plan

Bullish bias:

1. Above 4405 target 4425

2. If there is a breakout of 4425 target 4440-4450

3. If there is a failed breakdown of 4390 target 4425

Bearish bias:

1. Below 4390 target 4370

2. If there is a failed breakout of 4405 target 4390

3. If there is a breakdown of 4370 target 4360 then 4345

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. 13pts 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. 4405 - negative vanna

   1. 4404-4411 - OB (30min chart)

      1. 4408 midline

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

2. 4425 - negative vanna

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

      1. 4426 midline

3. 4445-4450 - negative vanna

   1. 4455 - positive Gamma

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

      1. 4443 midline

   3. 4438-4453 - 442.52-444.02 - $18.79B

4. 4465-4470 - negative vanna

   1. 4465 - positive Gamma

5. 4480 - negative vanna

   1. 4473-4490 - OB (4hr chart)

      1. 4481 midline

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

Below Spot:

1. 4390 - negative vanna

   1. 4390 - positive Gamma

2. 4370 - negative vanna

   1. 4375-4370 - positive Gamma

   2. 4371-4360 - OB (30min chart)

      1. 4365 midline

   3. 4384-4375 - 437.18-436.30 - $28.93B

3. 4360 - negative vanna

   1. 4360 - positive Gamma

4. 4345 - negative vanna

   1. 4345 - positive Gamma

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

      1. 4336 midline

   3. 4349-4344 - 433.65-433.19 - $12.14B

5. 4325-4320 - negative vanna

6. 4305 - negative vanna

   1. 4304-4297 - OB (1hr chart)

      1. 4301 midline

   2. 4325-4292 - 431.26-427.92 - $18.46B

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Dark Pool Levels

We had a $1B print near the lows of the day at 4376 (436.30).

Above Spot:

1. 4393-4410 - 438.06-439.72 - $25.04B

2. 4438-4453 - 442.52-444.02 - $18.79B

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. 4384-4375 - 437.18-436.30 - $28.93B

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. 4371-4360 - OB (30min chart)

   1. 4365 midline

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

   1. 4336 midline

3. 4304-4297 - OB (1hr chart)

   1. 4301 midline

4. 4276-4263 - OB (1hr, 2hr, 4hr chart)

   1. 4270 midline

5. 4195-4166 - OB (4hr chart)

   1. 4181 midline

Green Outlines: OB’s or Demand; Blue Outline: OB’s or Supply

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Weekly Option Expected Move

SPX’s weekly option expected move is ~79.67 points. SPY’s expected move is ~8.00. That puts us at 4449.39 to the upside and 4290.05 to the downside. For SPY these levels are 444.50 and 428.50.

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. 4405-4450 - negative vanna

   1. 4425 medium

   2. 4450 major

2. 4465-4470 - negative vanna

3. 4480 - negative vanna

Below Spot:

1. 4390 - negative vanna

2. 4370 - negative vanna

3. 4360 - negative vanna

4. 4345 - negative vanna

5. 4325-4320 - negative vanna

6. 4305 - negative vanna

Aggregate view of Vanna via Volland

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Gamma

Positive Gamma Above Spot - acts as resistance

Positive Gamma Below Spot - acts as support

Negative Gamma - becomes permissive to price as it moves there - aka neither resistance nor support - simply just chillin and watching what’s happening…

Above Spot:

1. 4455-4465 - positive Gamma

2. 4475 - positive Gamma

Below Spot:

1. 4390 - positive Gamma

2. 4375-4370 - positive Gamma

3. 4360 - positive Gamma

4. 4345 - positive Gamma

Aggregate view of Gamma 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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