September 12, 2023 SPX, SPY, ES Trade Plan
Market Review - Last Session
As we provided in yesterday’s plan keep an open mind to a bullish market this week. With OPEX anything can happen and the chop that came is exactly what occurred. We had our typical traps - the bearish break of 4475 - and I should have stuck originally with 4470 as a more critical level, but you can see there was a lot of volume that traded at this zone - 4470-4475 - today.
OPEX weeks are some of the worst weeks to trade IMO and if you didn’t see today trade with more time in expiry and more importantly take your 10-20% profits and wait for the next trade.
We are now trading in between two of our critical levels - above 4471 - where today’s action mainly happened and 4500 a key level for bulls to reach and hold for further upside.
Let’s discuss some important levels that I will be keeping an eye out for this month…
Above Spot:
4458 - this is June’s VAH on the volume profile. While we broke below this we did come back strong this week to push back above it. It becomes an important level we follow
4471 - the VAH of last weeks - 9/5 - value area high
4500 - Septembers VAH - value area high - still forming and could change as we go through the month - it will be important for bulls to break above this for more upside
4516 - this is August’s POC - point of control on the volume profile. We are trading below this level and closed below it at 4515 on Friday.
4532 - this is August’s VAH - value area high on the volume profile. We rejected from this level on Friday and closed below it
4557 - this is July’s POC - point of control on the volume profile. We are trading below it, but if we can capture 4532 and hold it we will then navigate to this level next
4596 - this is July’s VAH - value area high on the volume profile. If we can break above 4557 and hold it we will target this area.
Below Spot:
4453 - Septembers POC - still forming and could change as we go through the month - we are currently trading above it which is critical for more upside
4430 - Septembers VAL - still forming and this range could continue to change and dynamically go up or down
4417 - this is August’s VAL - value area low on the volume profile. This would be a major defense by the bulls so we don’t have further selloff.
4400 - we have an uptrend line starting from May 24 and toughing August’s lows.
4368 - this is June’s POC - point of control - and price will look to see if it finds buyers here and balance
4309 - this is June’s VAL - value area low - we lose this and we get 4250-4200 pretty fast then. Why? There is not a lot of volume in this area that pushed price up so it will rip down pretty fast then
With that, let’s jump into the trade plan.
SPX/SPY/ES Intraday Overview (TL;DR)
Expect more chop - this market is waiting for CPI on Wednesday where we may finally get some movement in the market. Until then trades should be quick in/out and lock in profits. Thus the key to trading tomorrow is on failed breakdowns or breakouts.
If there is a failed breakout of 4500 target 4480.
If there is a failed breakdown of 4480 target 4500
I think we could play ping pong between 4480 and 4500. What will change this if a customer comes in to hedge a certain way for CPI day. Thus watch for the latest updates in Volland as the day progresses.
ADBE
No change to our analysis on ADBE and ER…
Important earnings week for ADBE. Earnings will hit Thursday after the bell and if we look at the volume profile you will see that 556 is a key level where if we lose it we start to target the VAL - value area low - from 8/28 at 540. Below that we target 520. Above 560 we target 563 then 572-580.
What about dealer positioning? 567.5 will act as resistance and 580-590 will be next area of resistance. To the downside 560 is important below that 555 and then 545. If we lose 545 then we target 535.
So ultimately, I think the following scenarios will play out:
If ER beat AND guides higher - 600-610 will come where we will find sellers then
If ER beat AND no guidance - 580-590 hits where we will find sellers
If ER no beat AND no guidance - 545 trades where we may find buyers then
If ER no beat AND guides lower - 535-530 trades where we may find buyers then
Important levels:
511-539 - bullish orderblock on daily chart
556 - last weeks VAL
560.56 - last week’s POC - breached and retraced back - currently below this level
563 - last week’s VAH
567.5 - negative vanna
572-580 - bearish orderblock on daily chart
580-590 - negative vanna
610 - negative vanna
For intraday updates please follow me on Twitter @DarkMatterTrade.
News Catalyst
6:00am est - NFIB Small Business Index
1:01pm est - 10-y Bond Auction
2:00pm est - U.S. federal budget
For more information on news events, visit the Economic Calendar
9/12 - SPX/ES/SPY Trade Plan
Bullish bias:
Above 4485 target 4500
If there is a failed breakdown of 4480 target 4500
If VIX continues going down then a breakout of 4500 targets 4510
Bearish bias:
If there is a failed breakout of 4500 target 4480
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. 52pts 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
Key Levels
Above Spot:
4500 - negative vanna
4485-4496 - 448.07-449.21 - $14.57B
4510-4550 - negative vanna
4505-4510 - OB (30min chart)
4507 midline
4505-4516 -450.12-451.16 - $17.57B
4510-4516 - OB (1hr, 2hr chart)
4508 midline
Below Spot:
4480-4460 - negative vanna
4455 - negative vanna
4457-4448 - OB (1hr chart)
4453 midline
4471-4458 - 446.66-445.42 - $18.42B
4435-4415 - OB (30min chart)
4425 midline
4434-4431 - 442.98-442.73 - $10.62B
4400 - negative vanna
4417-4401 - OB (2hr chart)
4409 midline
4404-4385 - 439.97-438.09 - $18.55B
4416-4356 - OB (4hr chart)
4386 midline
Dark Pool Levels
We had approx. $3B in dark pool prints at the 4485 level on Monday.
Above Spot:
4485-4496 - 448.07-449.21 - $14.57B
4505-4516 -450.12-451.16 - $17.57B
4568-4580 - 456.43-457.64 - $10.38B
Below Spot:
4471-4458 - 446.66-445.42 - $18.42B
4434-4431 - 442.98-442.73 - $10.62B
4404-4385 - 439.97-438.09 - $18.55B
4375-4367 - 437.03-436.29 - $12.66B
4340-4336 - 433.65-433.19 - $12.14B
4316-4283 - 431.26-427.92 - $18.46B
4205-4180 - 420.16-417.60 - $18.8B
I get my dark pool levels from Quant Data. How you want to view these levels is potential magnets. A lot of consolidation will happen at these levels so when we are trading away from one level price will then target the next area of interest whales have.
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. I use Sonarlab’s indicator on Tradingview to plot these.
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.
4505-4510 - OB (30min chart)
4507 midline
4510-4516 - OB (1hr, 2hr chart)
4508 midline
4572-4582 - OB (2hr, 4hr chart)
4577 midline
4573-4594 - OB (1D chart)
4584 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.
4458-4375 - OB (1D chart)
4416 midline
4457-4448 - OB (1hr chart)
4453 midline
4435-4415 - OB (30min chart)
4425 midline
4425-4414 - OB (1hr chart)
4419 midline
4417-4401 - OB (2hr chart)
4409 midline
4416-4356 - OB (4hr chart)
4386 midline
4362-4328 - OB (1D chart)
4345 midline
4345-4328 - OB (1hr, 2hr, 4hr chart)
4336 midline
Weekly Option Expected Move
SPX’s weekly option expected move is ~59.55 points. SPY’s expected move is ~6.27. That puts us at 4517.05 to the upside and 4397.95 to the downside. For SPY these levels are 451.79 and 439.25.
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:
4500 - negative vanna
4510-4550 - negative vanna
Below Spot:
4480-4460 - negative vanna
4455 - negative vanna
4400 - negative vanna
Gamma
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:
4490-4495 - positive gamma
4560-4580 - positive gamma
Below Spot:
4485 - positive gamma
4455 - positive gamma
4405-4400 - positive gamma
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.