May 18, 2023 SPX, SPY, ES Trade Plan

Good evening/day/morning traders. We had a tremendous week with the plan hitting key levels and trades throughout the last week even in the face of sideways choppy price action. Work and some personal travel has taken much of my time this week, but today we finally saw some movement after news hit on the debt ceiling discussions.

This news catalyst is going to be an important one until it is finalized one way or another. So be careful with any positions as any news on this topic could bring volatility to the market.

Let’s jump into the trade plan.

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

1. 8:30am est - Unemployment Claims

2. 8:30am est - Philly Fed Manufacturing Index

3. 9:05am est - FOMC Member Jefferson Speaks

4. 9:30am est - FOMC Member Barr Speaks

5. 10:00am est - Existing Home Sales

6. 10:00am est - FOMC Member Logan Speaks

As a reminder we are still in earnings season with the following companies reporting this week.

Companies reporting earnings for week of 5/15

For more information on news events, visit the Economic Calendar

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SPX/ES/SPY Trade Plan

Remember you can use this SPX trade plan to trade ES or SPY. ES value is approx. 14pts more than the SPX levels shared below. To get SPY levels simply take the SPX levels below and divide by 10.02.

Bullish bias:

1. Above 4170 target 4185

2. If there is a breakout of 4185 target 4205

   1. Use VOLD indicator for trend continuation

   2. VIX should be decreasing

3. If there is a failed breakdown of 4150 target 4170

   1. Use VOLD indicator for trend reversal

   2. VIX should be decreasing

Bearish bias:

1. Below 4150 target 4135

2. If there is a failed breakout of 4185 target 4170

   1. Use VOLD indicator for trend reversal

   2. VIX should be increasing

3. If there is a breakdown of 4130 target 4115

   1. Use VOLD indicator for trend continuation

   2. VIX should be increasing

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SPX - The Why Behind the Plan

Key Levels

Above Spot:

1. 4170 - negative vanna

   1. 4175 - positive gamma

   2. 4170 - (415.66) - $5.36B

2. 4185 - negative vanna

   1. 4176-4200 - OB (2hr chart)

   2. 4187 is the midline in this supply zone

3. 4210 - negative vanna

   1. 4200 - positive gamma

4. 4231-4242 - OB (1hr chart)

Below Spot:

1. 4150 - negative vanna

   1. 4150 - positive gamma

   2. 4155-45 - (413.39, 414.26) - $6.12B

   3. 4150-4135 - FVG (30min chart)

2. 4130 - positive gamma

   1. 4137-33 - (412.54-412.15) - $17.31B

3. 4110 - negative vanna

   1. 4110 - positive gamma

   2. 4125-4110 - OB (2hr chart)

   3. 4128-15 - (411.59-410.34) - $11.10B

4. 4104-4098 - OB (15min chart)

   1. 4090 - negative vanna

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Dark Pool Levels

The 4133-37 zone continues to see more dark pool action with an increase of $2B printed at this level since Friday.

Above Spot:

1. 4170 - (415.66) - $5.36B

Below Spot

1. 4155-45 - (413.39, 414.26) - $6.12B

2. 4137-33 - (412.54-412.15) - $17.31B

3. 4128-15 - (411.59-410.34) - $11.10B

4. 4108-04 - (409.62-409.22) - $8.56B

5. 4072 - (406.03) - $4.49B

6. 4055-45 - (404.48-403.64) - $10B

7. 3999-89 - (398.76-397.73) - $6.02B

8. 3977-68 (396.53-395.62) - $12.87B

5/17 Dark Pool Levels via Quant Data

We need to pay attention to these dark pool levels. Mark them on your chart as key levels that we should pay attention to. Remember the levels where we see dark pool prints greater than $2-4B should peak our interest. I get my dark pool levels from Quant Data.

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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.

1. 4176-4200 - OB (2hr chart)

2. 4231-4242 - OB (1hr chart)

3. 4242-4279 - FVG (2hr chart)

4. 4274-4291 - OB (2hr 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. OB’s are the stronger levels over FVG’s.

1. 4150-4135 - FVG (30min chart)

2. 4125-4110 - OB (2hr chart)

3. 4104-4098 - OB (15min chart)

4. 4098-4072 - FVG (1hr chart)

5. 4049-4035 - OB (2hr chart)

Green Fill: Bullish FVG’ or Demand - Green Outlines: OB’s or Demand; Blue Fill: Bearish FVG or Supply - Blue Outline: OB’s or Demand

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Weekly Option Expected Move

SPX’s weekly option expected move is ~63.54 points. SPY’s expected move is ~6.42. Remember over 68% of the time price will resolve it self in this range by weeks end.

SPX Weekly Expected Move for Week of 5/15

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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.

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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:

1. 4170 - negative vanna

2. 4185 - negative vanna

3. 4210 - negative vanna

Below Spot:

1. 4150 - negative vanna

2. 4110 - negative vanna

3. 4090 - negative vanna

4. 4060 - negative vanna

Aggregate view of Vanna via Volland

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Gamma and Delta-Adjusted Gamma (DAG)

Positive Gamma Above Spot - acts as resistance

Positive Gamma Below Spot - acts as support

Negative Gamma - becomes permissive to price as it moves there - aka neither resistance nor support - simply just chillin and watching what’s happening…

Above Spot:

1. 4160 - positive gamma

2. 4175 - positive gamma

3. 4200 - positive gamma

Below Spot:

1. 4150 - positive gamma

2. 4130 - positive gamma

3. 4110 - positive gamma

4. 4090 - positive gamma

5. Dealers must sell below 4150 and above 4170

Aggregate view of Gamma levels

Dealer buying vs selling pressure - positive notional value = buying - negative notional value = selling

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Charm

Charm total notional value is bullish - negative is bullish and positive bearish - take the total of the far left and far right values.

Negative total notional value shows bullish charm

When reviewing Charm we also need to account for SPY’s charm. It is leaning bearish.

SPY Charm - Aggregate View

For the full charm effect to play out ideally we want to see SPX and SPY in sync.

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My Intraday Trading Rules

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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.

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