December 18, 2023 SPX, SPY, ES Trade Plan

Dec 18, 2023

Weekly Market Overview

Add another green week to the SPX - bringing it to 7 weeks in a row now. Amazing - just when the bulls thought they had taken the SPX back at the end of October - boy has did that change quickly in November and December.

From a news standpoint this week does have a few catalysts through the week. It all starts Tuesday when Japan’s version of the FOMC comes out overnight with a press conference. We continue into Tuesday morning with Canada’s CPI print and US Building Permits.

Wednesday overnight we have UK’s CPI print followed by that later in the morning after market open is Consumer Confidence numbers and Existing Home Sales.

Thursday presents us with GDP numbers and Unemployment Claims. We end the week Friday with UK Retail Sales overnight and then in the morning we have PCE Price Index and Good Orders premarket and after open we have the UoM Consumer Sentiment and New Home Sales.

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So the week shouldn’t be short of any volatility.

From a historical standpoint we have conflicting views on what the next week to two weeks will present us. Obviously volume will be declining as we get closer to the holidays.

Here is the first view of historical data shared by Wayne Whaley on X - where if we had a negative Grinch - ie the 3 trading days before and after Christmas - then we have had a positive January 16 times up and 3 times down. Additionally, if the Grinch does show up we then have a positive calendar year with an avg increase of 19.4%! Wow! That would put us way past ATH’s and then some - that sounds exciting right!

Will the Grinch come this year? A historical view of the SPX where if the 3 days before and after Christmas we ended negative, we were welcomed with a positive January and even the following year

His other scan of data shows that the 5 days before Christmas when it has had a year where it has gained more than 10% then this week ends 24 times up and 5 times down.

When the trailing year for NQ is >10% - NQ is up 24 times and down 5 times over the next 5 trading days

So you can see the conflict we are faced this week and when you add to that the typical seasonality of the rest of December is quite bullish…

Seasonality view of the market - suggesting that the rest of December will continue to be bullish

So let’s not predict and let’s jump into the key levels for the week.

News Catalysts

10:00am est - Home builder confidence index

For more information on news events, visit the Economic Calendar

12/18 SPX/SPY/ES Intraday Overview (TL;DR)

4705-4740 - is a chop zone. Don’t get caught trading in the middle of this zone unless you are already in a trade or playing failed breakdowns or breakouts within this zone. What are those?

So wait to short 4740-4730 zone if we get a failed breakout - if we are in the first hour of trading I want to see one 5 min candle close below 4740-4735 and ideally another 5 min candle test around it before closing below that level. You can also short it on the breakdown of 4730. The target is 4710.

I would only long if we breakout of 4740 - similar to above as it relates to a 5 min candle close - and we will target 4760. The other trade I will be looking for is if we get a failed breakdown of 4730-4725 (futures action in this zone) to target 4740. The other trade I would take if we got there is 4710-4705 I would take a long here to target back towards 4720-4730.

Shorts below 4705 are going to be tough and in 10 pt increments. First targeting 4695, then 4685. We finally get a larger selloff if 4685 breaks targeting 4670. These are really risky IMO and you should manage trades closely.

My Trading Rules

Dark Matter

April 11, 2023

Read full story

12/18 - SPX/ES/SPY Trade Plan

Bullish bias:

If there is a failed break down of 4740-4735 target 4760
1. This is pending overnight action in futures - check chat room in morning for updates on this trade idea
If there is a failed break down of 4710-4705 target 4725
Above 4730 target 4740
If VIX continues going down then a breakout of 4745 targets 4760

Bearish bias:

If there is a failed breakout of 4735-4740 target 4715
1. This is pending overnight action in futures - check chat room in morning for updates on this trade idea
If there is a failed breakout of 4725-4730 target 4715
Below 4715 target 4705
If VIX continues going up then a breakdown of 4705 targets 4695

As always keep an eye on Volland30 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. 49pts more than the SPX levels shared. To get SPY levels simply take the SPX levels and divide by 10.01.

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SPX - The Why Behind the Plan

Volume Profile & Trends

All eyes are on this pennant - we get that expected break to the upside that begins our next leg up…

SPX Bullish Triangle Patter seen on the 30min chart — SPX Bullish Pennant Pattern seen on the 30min chart

Let’s review our volume profiles…

From a quarterly volume profile on the weekly chart some key levels are seen.

4738 - Q4 VAH - still forming
4715 - Q4 2021 VAH
4684 - Q4 2021 POC
4551 - Q4 POC - still forming
4450 - Q3 POC

SPX Weekly Chart with Quarterly Volume Profile Levels

If we take a look at the daily chart and review the monthly volume profile we find the following levels…

4818 - January ‘22 VAH
4786 - January ‘22 POC - hasn’t been breached
4714 - November '21 VAH
4681 - December's VAH - still forming
4564 - December's POC - still forming
4546 - December’s VAL - still forming

SPX Daily Chart with Monthly Volume Profile Levels

Let’s now look at the 4hr chart and review what the weekly volume profile levels show.

4738 - Weekly High & 12/11 Weekly VAH
4719 - 12/11 Weekly POC
4647 - 12/11 Weekly VAL
4593 - Weekly Low
4585 - 12/4 Weekly VAH
4567 - 12/4 Weekly POC - hasn’t been breached

SPX 4hr Chart with Weekly Volume Profile Levels

On the smaller timeframe and intraday let’s go to our 30min chart where we will put our session volume profile on. Our levels of importance are…

4727 - 12/14 VAH
4725 - Daily Inside Candle High
4724 - 12/15 VAH
4716 - 12/15 VAL
4704 - Daily Inside Candle Low
4651 - 12/13 VAL

SPX 30min Chart with Session Volume Profile Levels

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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.

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:

4725-4730 - negative vanna
4740-4745 - negative vanna
4760-4765 - negative vanna
4795 - negative vanna

Below Spot:

4710-4705 - negative vanna
4695 - negative vanna
4685 - negative vanna
4670 - negative vanna
4660 - negative vanna
4650 - negative vanna
4630 - negative vanna

Orderblocks (OB)

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.

4726-4733 - OB (30min chart)
1. 4730 midline
4737-4748 - OB (15min chart)
1. 4743 midline
4778-4797 - OB (1hr, 2hr chart)
1. 4788 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.

4652-4643 - OB (2hr chart)
1. 4648 midline
4631-4627 - OB (15min chart)
1. 4629 midline
4591-4580 - OB (30min chart)
1. 4586 midline
4571-4565 - OB (15min chart)
1. 4568 midline
4568-4546 - OB (1D chart)
1. 4557 midline
2. 4554-4525 - OB (4hr chart)
  1. 4536 midline
3. 4554-4541 - OB (30m chart)
  1. 4548 midline

Orderblocks via Smart Money Concepts - blue are bearish supply blocks where as green are bullish demand blocks

Key Levels

Above Spot:

4725-4730 - negative vanna
1. 4726-4733 - OB (30min chart)
  1. 4730 midline
2. 4725 - Daily Inside Candle High
3. 4727 - 12/14 VAH
4740-4745 - negative vanna
1. 4737-4748 - OB (15min chart)
  1. 4743 midline
2. 4738 - Previous Weekly High & 12/11 Weekly VAH
3. 4738 - Q4 VAH - still forming
4760-4765 - negative vanna
4795 - negative vanna
1. 4778-4797 - OB (1hr, 2hr chart)
  1. 4788 midline
2. 4786 - January ‘22 POC - hasn’t been breached

Below Spot:

4716 - 12/15 VAL
1. 4715 - Q4 2021 VAH
2. 4714 - November '21 VAH
4710-4705 - negative vanna
1. 4704 - Daily Inside Candle Low
4695 - negative vanna
4685 - negative vanna
1. 4684 - Q4 2021 POC
2. 4681 - December's VAH - still forming
4670 - negative vanna
4660 - negative vanna
4650 - negative vanna
1. 4652-4643 - OB (2hr chart)
  1. 4648 midline
2. 4651 - 12/13 VAL
3. 4647 - 12/11 Weekly VAL

Weekly Option Expected Move

SPX’s weekly option expected move is ~54.53 points. SPY’s expected move is ~5.61. That puts us at 4773.71 to the upside and 4664.65 to the downside. For SPY these levels are 474.98 and 463.76.

Remember over 68% of the time price will resolve it self in this range by weeks end.

TradingView Chart Access

For access to my chart laying out all of the above key levels please visit here.

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Dark Matter Trade

My Intraday Trading Rules

I do not trade within the first half hour UNLESS I am in a trade from the prior session and looking to close the trade or we have a major gap or a key level already broken I let the initial balance do its thing - I am just a small fish in a large ocean of traders so let's let them fight it out…

2 years ago · Dark Matter

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.