December 19, 2023 SPX, SPY, ES Trade Plan
Market Recap
The market moved relatively fast overnight breaking our bullish pennant with a gap up at the open on the SPX - where price opened at 4730, finding a low of 4728, and then hitting our updated target we provided in our chat room this afternoon at 4750.
Our trade plan provided two trade ideas today…
Above 4730 target 4740
If there is a failed break down of 4740-4735 target 4760
Now trade idea 1 hit immediately as mentioned at the open. I didn’t take the trade at the open and instead let it play out, but what clicked immediately if it hasn’t for you is that if price comes back in this area then I want to be ready to pounce on it and define my risk to go long if I do enter a trade.
At around 10:45am est price started to trend back towards this area of support and after finding 3 candles on the 5min chart close above 4730 I missed this trade… Yes full honesty here I got busy missed this amazing trade and instead I waited for the next trade to go long at 4740 where we were facing some back and forth around this level.
After what felt like forever - we finally hit 4749 - and all my trades were closed. I also called for longs in ADBE near the lows within the chat room as well which I have closed as well.
Alright, enough of that recap. Let’s jump into the plan…
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News Catalysts
10:00pm est - BoJ Interest Rate Decision
8:30am est - Canada CPI
8:30am est - Building Permits
8:30am est - Housing Starts
9:30am est - Richmond Fed President Thomas Barkin speaks
12:30pm est - Atlanta Fed President Raphael Bostic speaks
For more information on news events, visit the Economic Calendar
12/19 SPX/SPY/ES Intraday Overview (TL;DR)
4735-4745 - Ping pong zone - potentially where we start the session. Wouldn’t just jump in a trade in the middle of this zone. Wait to see how price reacts on the edges here. Could turn into a scalp like trade or buy with time in options to reduce exposure either way it goes.
Ok so what’s below 4735? Honestly, not a lot. You could scalp a quick 10 pts here to target 4725-4720, but anything else is just risky and adverse to chop or reversals. In other words buyer beware or shorter beware.
So what’s above? What is the bullish bias?
4755 - This is our first target - scalp 10 pts. I would not be surprised if we hit this level and sold back down to test 4735. It could be that kind of day where we are rangebound.
4765 - If we break and hold 4755 - I want some consolidation near 4755 so this means we could hit 4757 back down to 4750 as it consolidates.
Ideally, I want to see one of these opportunities occur:
A failed breakdown of 4735 - opportunity to go long
A failed breakdown of 4725 - opportunity to go long
A breakout of 4745 - opportunity to go long
A failed breakout of 4745 - opportunity to go short
Only in the first hour of trading otherwise see Volland data for updated dealer options flow
A breakout of 4755 - opportunity to go long
12/19 - SPX/ES/SPY Trade Plan
Bullish bias:
If there is a failed break down of 4735 target 4745
If there is a failed break down of 4725 target 4745
I am only looking at this trade in the first hour - otherwise see updated Volland dealer options flow
Above 4745 target 4755
If VIX continues going down then a breakout of 4755 targets 4765
Bearish bias:
If there is a failed breakout of 4745 target 4735
Below 4735 target 4725
High risk be careful for reversals and manage trade
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. 53pts more than the SPX levels shared. To get SPY levels simply take the SPX levels and divide by 10.01.
SPX - The Why Behind the Plan
Volume Profile & Trends
Our pennant from yesterday’s trade plan came to fruition - with a gap up at the open we pushed price well above the pennant.
In one piece of good news for the bears is that we have a rising wedge pattern forming. This pattern typically indicates a bearish trend reversal. This indicates that momentum is starting to slow down. Does this mean full port into shorts? No. Does this mean a huge correction is coming? No. Is there a potential retracement coming? Quite possibly.
Let’s review our volume profiles…
From a quarterly volume profile on the weekly chart some key levels are seen.
4749 - Q4 VAH - still forming
4740 - 2021 VAH
4715 - Q4 2021 VAH
4687 - 2021 POC
4684 - Q4 2021 POC
4552 - Q4 POC - still forming
4450 - Q3 POC
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
4706 - December's VAH - still forming
4564 - December's POC - still forming
4546 - December’s VAL - still forming
Let’s now look at the 4hr chart and review what the weekly volume profile levels show.
4749 - Weekly High
4748 - 12/18 Weekly VAH - still forming
4739 - 12/18 Weekly VAL - still forming
4719 - 12/11 Weekly POC
4647 - 12/11 Weekly VAL
4593 - Weekly Low
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…
4747 - 12/18 VAH
4739 - 12/18 VAL
4727 - 12/14 VAH
4724 - 12/15 VAH
4716 - 12/15 VAL
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:
4745 - negative vanna
4755 - negative vanna
4765 - negative vanna
4785-4790 - negative vanna
Below Spot:
4735 - negative vanna
4725-4700 - negative vanna
4690 - negative vanna
4680 - 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.
4745-4748 - OB (10min chart)
4747 midline
4778-4797 - OB (1hr, 2hr chart)
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.
4738-4731 - OB (30min chart)
4735 midline
4719-4704 - OB (1hr chart)
4712 midline
4652-4643 - OB (2hr chart)
4648 midline
4631-4627 - OB (15min chart)
4629 midline
4591-4580 - OB (30min chart)
4586 midline
Key Levels
Above Spot:
4745 - negative vanna
4745-4748 - OB (10min chart)
4747 midline
4747 - 12/18 VAH
4748 - 12/18 Weekly VAH - still forming
4749 - Q4 VAH - still forming
4749 - Weekly High
4755 - negative vanna
4765 - negative vanna
4785-4790 - negative vanna
4786 - January ‘22 POC - hasn’t been breached
4778-4797 - OB (1hr, 2hr chart)
4788 midline
Below Spot:
4735 - negative vanna
4738-4731 - OB (30min chart)
4735 midline
4725-4700 - negative vanna
4727 - 12/14 VAH
4724 - 12/15 VAH
4719 - 12/11 Weekly POC
4719-4704 - OB (1hr chart)
4712 midline
4715 - Q4 2021 VAH
4716 - 12/15 VAL
4714 - November '21 VAH
4706 - December's VAH - still forming
4690 - negative vanna
4687 - 2021 POC
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.
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.