September 13, 2023 SPX, SPY, ES Trade Plan
Market Review - Last Session
Today’s plan will be short as most of today’s move and direction will be decided after the CPI numbers are released pre-market at 8:30am est.
Instead, I want to focus a bit on yesterday’s trade plan and the market. While I am typically not a trader post lunch hours unless I am swinging to the next day, I had too much of a bias towards the action today. In reality, if we stuck to what the data was showing and telling us the break of 4480 this time would not have a similar fate and find support at 4470.
We even saw the market attempt to close its gap near the highs before selling quickly to 4456. Besides beating oneself for falling in favor of a choppy market we need to remove that bias and just play level to level and see the latest updates - such as from Volland - to provide us with the best direction to be successful.
Anyway, as a trader these moments will come, but it is how you react to it and learn that matters most. In today’s market this cost me to not trade today and not enter a trade and hold it against market trends. I simply didn’t like the data nor did it mentally agree with me as we went through the first hour of trading so I tuned out.
If you are keeping track - although we had yesterday’s selloff - we continue to trade above last week’s closing price. Currently the two weekly candles are forming inside candles - the market is coiling for a major move. The break of these candles will be powerful momentum for the market.
We once again rejected last week’s value area low - 4471 and are trading just above June’s value area high.
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:
4471 - the VAH of last weeks - 9/5 - value area high
4488 - 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:
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
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
4443 - 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)
Today’s action all comes down to the pre-market CPI print. Expectations are for it to be higher than forecasted which will be risk off for equities.
I would recommend seeing the latest data from Volland for changes to dealer positioning after the move.
The bulls will want to push price above 4480 to target 4495-4500. Break there and VIX continues down could see 4515.
The bears need a higher than expected CPI and below 4455 targets 4440. If VIX continues up then a breakdown of 4440 targets 4425.
ADBE
Quite the beat down on ADBE yesterday. For the past week or so we held that 560-555 zone pretty well until it caved yesterday and sending us all the way towards the value area low at 540 - our target should we break below 556.
525-530 now becomes the key critical zone for ADBE to defend to push it back to the upside. It all comes down to ADBE’s ER this Thursday after the bell. Complete 50/50 toss up on this chart.
This chart will either go towards 500-490 zone or carry the ticker back up towards 580 and even 610.
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 - 520 trades where we may find buyers then
If ER no beat AND guides lower - 490-500 trades where we may find buyers then
Important levels:
501 - July’s VAL
511 - Augusts VAL
511-539 - bullish orderblock on daily chart
520 - August’s POC
532 - August’s VAH
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
8:30am est - CPI
1:01pm est - 30-y Bond Auction
2:00pm est - Federal Budget Balance
For more information on news events, visit the Economic Calendar
9/13 - SPX/ES/SPY Trade Plan
Bullish bias:
Above 4480 target 4495
If there is a failed breakdown of 4455 target 4480
If VIX continues going down then a breakout of 4500 targets 4515
Bearish bias:
Below 4455 target 4440
If there is a failed breakout of 4480 target 4455
If VIX continues going up then a breakdown of 4440 targets 4425
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:
4475-4480 - negative vanna
4474-4487 - OB 30min chart)
4480 midline
4485-4496 - 448.07-449.21 - $15.92B
4500 negative vanna
4505-4510 - OB (30min chart)
4507 midline
4515 negative vanna
4510-4516 - OB (1hr, 2hr chart)
4508 midline
4505-4516 -450.12-451.16 - $17.57B
4550 negative vanna
Below Spot:
4455 - negative vanna
4457-4448 - OB (1hr chart)
4453 midline
4471-4458 - 446.66-445.42 - $20.28B
4440 - negative vanna
4435-4415 - OB (30min chart)
4425 midline
4434-4431 - 442.98-442.73 - $10.62B
4425-4414 - OB (1hr chart)
4419 midline
4425 - negative vanna
4405-4400 - negative vanna
4417-4401 - OB (2hr chart)
4409 midline
4404-4385 - 439.97-438.09 - $18.55B
4390-4385 - negative vanna
4416-4356 - OB (4hr chart)
4386 midline
Dark Pool Levels
No major prints or changes to our dark pool. We had $1B prints at 4485 and 4458.
Above Spot:
4485-4496 - 448.07-449.21 - $15.92B
4505-4516 -450.12-451.16 - $17.57B
4568-4580 - 456.43-457.64 - $10.38B
Below Spot:
4471-4458 - 446.66-445.42 - $20.28B
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.
4474-4487 - OB 30min chart)
4480 midline
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:
4475-4480 - negative vanna
4495-4550 - negative vanna
4500 negative vanna
4515 negative vanna
4550 negative vanna
Below Spot:
4455 - negative vanna
4440 - negative vanna
4425 - negative vanna
4405-4400 - negative vanna
4390-4385 - 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:
4485-4490 - positive gamma
4560 - positive gamma
4570 - positive gamma
Below Spot:
4455 - positive gamma
4440 - positive gamma
4405-4400 - positive gamma
4390-4385 - 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.