July 18, 2023 SPX, SPY, ES Trade Plan
Good evening/day/morning traders. What an exciting trading day today was. Yesterday, we provided not only a SPX trade idea, but we also presented you with plans on ADBE, ENPH, PANW, NFLX, TSLA, QQQ, and META. All via Twitter where I highly suggest you follow myself and CaptainWick as we provide additional analysis on individual tickers outside of SPX/SPY/ES.
Tomorrow morning we have key ER’s in the finance sector with Bank of America, Charles Schwab, and Morgan Stanley reporting. The outcome and guidance of these ER’s will drive the markets tune tomorrow. We also have retail sales coming out pre-market as well.
In terms of SPX I think we are now in a key area of consolidation and that we could see chop between 4500-4525. This will be a key area we need to break for the next leg up or down. Let’s get into the trade plan and get more clarity…
Overview (TL;DR)
For the bulls it comes down to defending the 4515-4520 level tomorrow to target 4545.
For the bears they need to break below 4515 to target 4500. A break of 4500 will yield a larger selloff towards 4470.
Let’s jump into the trade plan.
For intraday updates please follow me on Twitter @DarkMatterTrade.
News Catalyst
8:30am est - Retail Sales
8:30am est - CAD CPI
9:15am est - Industrial Production
10:00am est - NAHB Housing Market Index
10:00am est - Business Inventories
10:00am est - FOMC Member Barr Speaks
Pre-market - Financial Earnings Releases
Earnings season officially has begin. Here are the key earnings to keep an eye for.
For more information on news events, visit the Economic Calendar
SPX/ES/SPY Trade Plan
Bullish bias:
Above 4525 target 4540
If there is a failed breakdown of 4515 or 4520 target 4540
If there is a breakout of 4550 target 4570
Bearish bias:
Below 4515 target 4500
If there is a breakdown of 4500 target 4470
If there is a breakdown of 4470 target 4450
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. 31pts more than the SPX levels shared. To get SPY levels simply take the SPX levels and divide by 10.03.
SPX - The Why Behind the Plan
Key Levels
Above Spot:
4525 - negative vanna - 0DTE
4540-4545 - negative vanna
4540-4546 - OB (15min chart)
4543 midline
4549-4561 - OB (30min chart)
4555 midline
4570 - negative vanna
4567-4583 - OB (4hr chart)
4575 midline
4595 - negative vanna
4589-4597 - OB (30min chart)
4593 midline
Below Spot:
4520 - negative vanna
4515 - negative vanna - 0DTE
4520-4516 - OB (30min chart)
4518 midline
4522-4509 - 450.89-449.62 - $12.52B
4500 - negative vanna
4498-4493 - OB (15min chart)
4495 midline
4470 - negative vanna
4481-4466 - OB (1hr & 2hr chart)
4473 midline
4471 - 445.84 - $3.17B
4450 - negative vanna
4453-4438 - 444.02-442.48 - $20.06B
Dark Pool Levels
As we uncover more dark pool prints in this 4509-4522 zone we see additional prints there totaling now $12.52B. You can see this is now clearly a level of interest to these wheels and further adds to my analysis that this 4500-4530 zone could be an area of consolidation before our next move.
4522-4509 - 450.89-449.62 - $12.52B
4471 - 445.84 - $3.17B
4453-4438 - 444.02-442.48 - $20.06B
4421-4393 - 440.85-438.06 - $25.11B
4384-4375 - 437.18-436.20 - $24.71B
4349-4344 - 433.65-433.19 - $12.14B
4325-4292 - 431.26-427.92 - $18.46B
We need to pay attention to these dark pool levels. Remember the levels where we see dark pool prints greater than $4B should peak our interest. I get my dark pool levels from Quant Data.
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.
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.
4540-4546 - OB (15min chart)
4543 midline
4549-4561 - OB (30min chart)
4555 midline
4567-4583 - OB (4hr chart)
4575 midline
4589-4597 - OB (30min chart)
4593 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.
4520-4516 - OB (30min chart)
4518 midline
4498-4493 - OB (15min chart)
4495 midline
4481-4466 - OB (1hr & 2hr chart)
4473 midline
4408-4399 - OB (2hr chart)
4404 midline
4393-4380 - OB (1hr chart)
4386 midline
4375-4362 - OB (1hr chart)
4369 midline
4344-4328 - OB (1hr & 2hr chart)
4336 midline
4304-4297 - OB (1hr chart)
4301 midline
Weekly Option Expected Move
SPX’s weekly option expected move is ~55.03 points. SPY’s expected move is ~5.69. That puts us at 4560.44 to the upside and 4450.38 to the downside. For SPY these levels are 454.97 and 443.59.
Remember over 68% of the time price will resolve it self in this range by weeks end.
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:
4525 - negative vanna - 0DTE
4540-4545 - negative vanna
4570 - negative vanna
4595 - negative vanna
4615-4625 - negative vanna
Below Spot:
4520 - negative vanna
4515 - negative vanna - 0DTE
4500 - negative vanna
4470 - negative vanna
4450 - negative vanna
Charm
Remember if IV is not expanding charm will start to overtake Vanna especially 0DTE as it comes closer to expiration.
For all expiry’s, Charm total notional value is bullish - negative is bullish and positive bearish - take the total of the far left and far right values. It shows a target of 4545 should we continue to trend bullish.
The 0DTE view on SPX Charm shows a bullish bias. I would expect any dips to be bought intraday and it shows a similar target of 4545.
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.