August 23, 2023 SPX, SPY, ES Trade Plan

Last Trading Session Recap

Yesterday was a tough day to trade and presented many challenges. I took puts, didn’t like them and cut them at breakeven. Had I stuck to my convictions and the data I would have netted a 100% on SPY and 20% on ADBE. Let’s review this together and learn from it.

Before we do that let’s review a few key levels from our plan:

1. 4405

2. 4425

3. 4390

With the VIX going up and down we bounced between these levels and with the real time Volland updates we would carve out that with 0DTE options 4385 and 4420 would be the highs and lows of the day. We mentioned the VIX in last night’s plan and we got both ways on the VIX which gave us the sideways chop although it had a bearish bias to that chop. Additionally, we also had a key dark pool level at 4384 and it held the lows of the day pretty well.

These types of trading sessions are tough to predict and we use our levels to best gauge the areas where we could reverse or continue. As you learn you will know that some of the past few sessions that have provided a wide range that post it we go into a period distribution and accumulation.

I know it sometimes seems like there are so many levels to keep track, but when we overlay them we find the hidden gems and those become the zones we play in - consider it your sandbox. Trading takes paytience, finding these levels, and keeping the emotions in check and adjusting your bias as the data is presented to you.

Stock Market Heatmap was Risk Off for 8/22

With that let’s jump into the trade plan.

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

We have been accumulating a lot of dark pool at today’s highs and lows of the day. Whatever area breaks and holds out of these zones will start the next big move in the markets. See our dark pool analysis for more details.

Bulls are pushing the market overnight and want to keep price above 4385. For entry we want to stay above 4395 to target 4415 then 4425.

For the bears they need to breakdown 4395 to target 4385 and then 4370.

Last, but not least keep an eye on VIX. While PMI data is expected pre-market and new home sales at 10am est if they come at or near expectations we could see sideways action again.

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ADBE

522.5 and 525 are the key levels of resistance above. Support below is 515 and 510. Could continue to chop in this range, which if you look at the charts we have been trading between 530 and 505 all this month. Breaking these levels is when we get a larger move. In the mean time we scalp including any two way actions.

1. Above 522.5 target 525 then 527.5

2. Below 522.5 target 515 then 512.5

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

$ADBE chart - overview of key orderblocks

For intraday updates please follow me on Twitter @DarkMatterTrade.

News Catalyst

1. 8:30am est - Flash Manufacturing PMI

2. 8:30am est - Flash Services PMI

3. 10:00am est - New Home Sales

For more information on news events, visit the Economic Calendar

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8/23 - SPX/ES/SPY Trade Plan

Bullish bias:

1. Above 4395 target 4415

2. If there is a breakout of 4415 target 4425

3. If there is a failed breakdown of 4385 target 4415

Bearish bias:

1. Below 4385 target 4370

2. If there is a failed breakout of 4415 target 4400

3. If there is a breakdown of 4370 target 4355 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. 12pts 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. 4395 - negative vanna

2. 4425 - negative vanna

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

      1. 4426 midline

   2. 4393-4410 - 438.06-439.72 - $28.72B

3. 4450 - negative vanna

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

      1. 4443 midline

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

4. 4475-4480 - negative vanna

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

      1. 4481 midline

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

Below Spot:

1. 4385 - negative vanna

2. 4370 - negative vanna

   1. 4371-4360 - OB (30min chart)

      1. 4365 midline

   2. 4384-4375 - 437.18-436.30 - $28.93B

3. 4345 - negative vanna

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

      1. 4336 midline

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

4. 4325-4320 - negative vanna

5. 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 $1.78B print near the highs of the day at 4410 (439.30) and another $1.9B at 4393 (438.09). There is a lot of accumulation occurring near today’s high and the lows of the day…

Above Spot:

1. 4393-4410 - 438.06-439.72 - $28.72B

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. 4417-4435 - OB (1hr chart)

   1. 4426 midline

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

   1. 4443 midline

3. 4473-4490 - OB (4hr chart)

   1. 4481 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

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. 4395 - negative vanna

2. 4405-4450 - negative vanna

   1. 4425 medium

   2. 4450 major

3. 4475-4480 - negative vanna

Below Spot:

1. 4385 - negative vanna

2. 4370 - negative vanna

3. 4345 - negative vanna

4. 4325-4320 - negative vanna

5. 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. 4390 - positive Gamma

2. 4455-4465 - positive Gamma

3. 4475 - positive Gamma

Below Spot:

1. 4370 - positive Gamma

2. 4345 - positive Gamma

3. 4325-4320 - 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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