December 6, 2023 SPX, SPY, ES Trade Plan

Market Recap

Today was simple and as we have stated shorts are just not the trade I want at this time. And based on how confident I have been on how supportive this 4550-4525 zone is we again bounced off this zone and our trend line/wedge/channel we have been keeping on watch.

It only took one trade today and you were out of the trade by about 10am. While I mentioned wait it out until after the news when we opened and hit the lows of the day and you have conviction from your trade plan as I do I went long near the lows targeting 4570 as we put in the trade plan…

From the trade plan we mentioned…

• If there is a failed break down of 4555-4545 target 4570

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As discussed we came right into the zone I keep mentioning how supportive it is and to expect random reversals out of it. That’s exactly what we got hitting 4551 as the low and once I saw the 5min candles close between 9:35 to 9:40 - on the close of the 9:45 candle I went long around 4556.

Additionally I want to add as most people I know don’t really do a “scale in” approach with options or futures. Most people will just go “all in” at the moment of a key level. Instead, my recommendation is that you scale in. For example, if your typical sizing is 4 contracts at 4556 I would have entered with 2 contracts. Then as we kept holding this level for 2 more 5min candles my conviction increases and on the break of 4560 I could have scaled into 2 more contracts.

While this won’t give you the exact highest PnL it minimizes emotions on too large of a size in a trade and as you build confidence in the trade as it holds those key levels you can still capture most of its run. Try it out…it is frequently how I trade especially with some of the choppy conditions we have had over the past few weeks.

Let’s jump into the trade plan and review our key levels.

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News Catalysts

1. 8:15am est - ADP Non-Farm Employment Change

2. 10:00am est - BOC Rate Statement

For more information on news events, visit the Economic Calendar

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12/6 SPX/SPY/ES Intraday Overview (TL;DR)

Tomorrow we have news out pre-market which should determine whether the futures gapping up holds or not.

My LIS for more upside comes in at 4575. Should we breakout of this level we will target…