March 28, 2023 SPX, SPY, ES Trade Plan
Bears in control or more kangaroo market?
Good evening/day/morning traders. Great to be back this week and already seeing how big of an impact to my intraday trading it is to having a trade plan.
Last session trading recap
Couple of things from today…We #paytiently waited for SPX to get to that sweet spot of a failed breakout above 4005. For those asking, well how do you know there is a failed breakout or breakdown look for these key actions at the key levels we share in the plan:
Are we seeing wicks hit the level and reject?
What is the volume at that key level?
Has a 5/15/30 min candle closed above/below that key level?
What does options flow from Quant Data or Tradytics showing?
From today one of our bias trade plans and look back at the chart it came to fruition after my “wait a half hour” to see what the market does…
- If there is a failed breakout of 4000-05 target 3980
Another trade idea we had was the break of 3980 to target 3950. While we didn’t get this and we toyed with the level quite a bit to sell down to 3970 we continued to hold support here. Why? As we mentioned in the trade plan there was a dark pool print from Friday…
3968 - (395.62) Over $3B was reported on Friday
This ended up being the reason why we held 3970 IMO and will be a key level moving forward so mark it on your charts. Again, our goal isn’t to overdo levels on charts with squiggly lines all over the place, but the combo of these data points will save you from a green to red trade. It is also why on a 10pt move going your way I will ALWAYS bring my stop loss closer to preserving profit - I am not here to chase homeruns, but to compound and continue to build my bank and take profits out each week…
Overall great day on the trade we took on the failed breakout of 4005. Gained about $1,300 in profits on the day. We can do this team. Stay #paytient, compound, the gains will ultimately come. Put in the work, prepare, and it will pay off.
I enjoy interacting and learning from other traders so continue to share your trades, ideas, and how you use this trade plan by messaging me on Twitter @DarkMatterTrade.
News Catalyst
The 10am est news catalysts will be what moves the market especially if consumer confidence comes in too hot or too weak.
9am est - ECB President Lagarde Speaks
10am est - CB Consumer Confidence
10am est - Fed Gov. Barr testifies to Senate on banks
For more information on news events, visit the Economic Calendar
SPX/ES/SPY Trade Plan
Remember you can use this SPX trade plan to trade ES or SPY.
Bullish bias:
Above 3995 target 4020
If there is a breakout of 4020 target 4030-35
If there is a failed breakdown of 3965-70 or 3985 target 4005
Bearish bias:
Below 3985 target 3970
If there is a failed breakout of 4010-20 target 3985
If there is a breakdown of 3970 target 3955
SPX - The Why Behind the Plan
Key Levels
Alright, let’s take a bit of time to clean up our key levels…
3970 is the major support level holding any further selloff into 3950 then 3925.
4005 then 4020 continues to be a key level for the bulls to break through to push towards 4050 then 4065.
Below Spot:
3901-3890 - FVG (30min chart)
3910-15 - key dark pool level
3930-3901 - OB (4HR chart)
3960-3954 - OB (15min chart)
3968-70 - key dark pool level
Above Spot:
3979-3986 - FVG (30min chart)
3996-4031 - bearish OB (1HR chart)
4000 - 2/27 weekly VAH
4028 - 2/21 weekly VAH
4054 - February’s VAL
Dark Pool Levels
We need to pay attention to some key levels that have Dark Pool buildup. Mark them on your chart as key levels that we should pay attention to. Note I combine my dark pool analysis from multiple sources as I don’t get a clear picture from just one always - for this I use Quant Data and Tradytics.
3968 - (395.62) - Over $4.5B
$3B was reported on Friday
$1.5B was reported on Monday
3940-45 - (393.40) $1.81B was reported on Friday
3910-15 - (390.11) a key dark pool level that kept the market supportive
I like the below chart view from Tradytics and will keep a view of it from the previous day so we can monitor the changes to the levels…
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.
3979-3986 - FVG (30min chart)
3996-4031 - OB (1HR chart)
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.
3960-3954 - OB (15min chart)
3940-3932 - OB (15min chart)
3930-3901 - OB (4HR chart)
3901-3890 - FVG (30min chart)
3874-3843 - OB (1HR chart)
Volume Profile
Let’s review the volume profile and some key levels there. If you are unfamiliar with the Volume Profile I highly suggest reviewing some YouTube videos or reading this quick overview on it.
Some keywords to be aware of:
VAH = value area high
VAL = value area low
POC = point of control
Monthly Levels:
Updates:
March’s Value Area’s both increased by one point
For these monthly levels I suggest you visit yesterday’s trade plan.
Weekly Levels:
Updates:
We rejected 2/27’s VAH
We closed below the 3/6 POC
3922 - 3/20 weekly VAL
3951 - 3/20 weekly naked POC
Naked means it hasn’t been tested and will typically be a magnet for price to come back and either act as support or further consolidation to the downside
3986 - 3/6 weekly POC
4000 - 2/27 weekly VAH
4028 - 2/21 weekly VAH
An area that continues to face resistance since early March and will be a key level for continued upside trend
Weekly Option Expected Move
SPX’s weekly option expected move is ~84.66 points. SPY’s expected move is ~9.15. Remember over 68% of the time price will resolve it self in this range by weeks end.
VIX Update
Let’s review the VIX chart. VIX continued it’s selloff after hitting an OB on the 4hr chart. We are now trading near a key bullish OB.
Key levels…
Above Spot:
21.19-21.77
21.98-22.93
23.11-23.33
24.33-26.11
Below Spot:
21.60-20.18
19.60-18.90
16.03-15.43
15.41-14.98
Remember, typically VIX going down correlates with a uptrend in the market and vice versa for a downtrend in the market.
Vol.land 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.
As we are in a window of weakness with Vanna we cannot solely rely on these levels. It is imperative that for the next two weeks we look at key Gamma levels, orderblocks, dark pools and the VIX.
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:
3985 is negative vanna
3995 is negative vanna
4000 is positive vanna
Interesting to note that this level has now flipped from negative to positive
4005-4020 are negative vanna’s
4020 is the largest of the bunch
4030 is positive vanna
4040-45 is negative vanna
Below Spot:
3965 is negative vanna
3960-55 is positive vanna
3950 is negative vanna
3945-3939 is positive vanna
3925 is negative vanna
Gamma and Delta-Adjusted Gamma (DAG)
Positive Gamma Above Spot - acts as resistance
Positive Gamma Below Spot - acts as support
Above Spot:
4000 is positive Gamma
4005-20 is negative Gamma
If price floats through this zone dealers will not impact price as they are neutral to these levels - no buying or selling
What we will want to be looking for are 0DTE Volland or Options Flow Data to guide us through these levels for further upside
4025-30 is positive Gamma
Dealers must buy above 3960
Below Spot:
3975 is positive Gamma
3965 is positive Gamma
3950 is positive Gamma
3925 is positive Gamma
Dealers must sell below 3905
Charm
While Charm is on “vacation” I will continue to share the data just for observation purposes.
Charm is more negative on SPX. This suggests that Charm will have little a more bullish impact on SPX.
When reviewing Charm we also need to account for SPY’s charm. It is leaning bearish. Between the totals of SPY and SPX, SPX charm will outweigh SPY. When they are in sync that further adds to the charm impact.
Keep in mind the total notional value of SPX should be multiplied by 10 for comparison to SPY.
Final Take
If you just saw the closing price on SPX today you would have assumed chop/kangaroo market, but we got a nice range. I think today could be that again, but more chop. 3970 will be a key level to the downside and the area of 4005-4020 continues to be an area sellers continue to enter.
There is a good chance we open up and hit the higher ends of the range and selloff, but in a minimal way. The market ultimately feels like it wants to float its way up with intraday swings to keep a tight close end of the day. The market is indecisive and we are seeing it in this tight range playing out.
Stay #paytient and react to the key levels - no predictions! Good luck traders.
Reminder, this is an unusual trading month where we have an additional week of weakness in Vanna and Charm. So pay extra close attention to the Gamma levels and any key volume profile value area’s and points of control, along with bullish/bearish orderblocks, and dark pools. They will compliment our dealer data for this week.
I am going to share my key rules to intraday trading in the end of the plan moving forward to build better habits and allowing you to grow as a better trader.
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
I then wait for key levels targeting one level to the next and taking profits at each one.
If there are key levels that are 10pts apart that is when I have scalping mindset and anything above 10pts I want to give it the room to hit the price target with a 5 pt buffer to take profits once we reach within 5 pts of a target - I also tighten my stop loss once at 10-20% profit with the goal of never allowing trades to go red when I have a nice profit)
I supply options greeks with OB (order blocks) and FVG (fair value gaps) otherwise known as Smart Money Concepts
When I am scalping - ie targeting 10pt trade levels I will take profits and never go more than 10% red. Simple as that, know your trade plan strategy and the risk. When you are wrong you are wrong and reset
For 20pt trade level targets I will increase my stop losses to 20% and allow more of the trade to play in the event I entered too early
I try - key word try ha - avoid trading lunch hours defined as 12pm to 2 pm est. Money for the most part unless you are scalping - is made in the first 2 hours of the trading day and the last 2 hours
I always stick to two EMA’s on my chart and that’s the 10/50 EMA’s
When the 10ema is above 50ema we are bullish
When the 10ema is below the 50ema we are bearish
Go put these on your charts and when you view them on timeframes less than the daily timeframe you will see the power they provide
For scalpers out there the smaller timeframes provide great opportunities to scalp 5-10pt moves
There are more we could discuss including volume profile, low volume nodes that I think are great strategies to compliment option greeks. Maybe in the future we can include more details.
Trading is not for the unprepared. It is critical you abide to a strategy and checklist and walk into every trade with a plan. Without a plan you are simply gambling and have a better chance at the slot machines. There are more nuances to my weekly and daily checklists, but I think this provides a good read for now and we will/can continue adding to it.
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.