September 18, 2023 SPX, SPY, ES Trade Plan
Weekly Market Overview
The bears took it to the bulls as OPEX came with a red day where the SPX lost 1.22% on the day. Our trade plan worked perfectly and as I posted on X that it takes paytience and conviction. 4485 provided us some heat, but if we size our trades where mentally it doesn’t impact how we trade or impacts the trade plan then you should have walked away from Friday with a nice sizable profit.
Looking to this week all eyes will be on FOMC on Wednesday and whether the FED will raise rates again. Thus, expect chop/sideways action until FOMC. I would trade lighter until then and expect fake breakouts and breakdowns trapping traders both way. We also have PMI on Friday.
Let’s discuss some key levels for this week and even through the rest of this month as they could be major levels for support or resistance. 4450-4440 is extremely important for the bulls to begin taking control back. Lots of importance at this zone for many reasons, but if the bears push price below this zone more than likely we will see a lower low than August’s low - potentially targeting 4400.
I am not here to predict what the FED will do Wednesday, but if Powell comes out hawkish and increases rates then this will be extremely bearish and risk-off for the equities. Thus pay attention to the DXY and what the yields are doing. They go up risk off, they go down risk on.
Let’s discuss some important levels that I will be keeping an eye out for this month…
Above Spot:
4454 - Septembers POC - still forming and could change as we go through the month
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
4482 - the VAH of last weeks - 9/11 - value area high
4486 - Septembers VAH - value area high - still forming and will change as we go through the month
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:
4447 - 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)
Bulls want to defend and keep price above 4450 to target 4465. Above it 4475 then 4490.
Bears want to defend 4465 max 4475 to push price back towards 4450. For continued trend down bears want to break 4440 to target 4420. Below 4420 comes 4400.
For intraday updates please follow me on Twitter @DarkMatterTrade.
News Catalyst
10:00am est - NAHB Housing Market Index
For more information on news events, visit the Economic Calendar
9/18 - SPX/ES/SPY Trade Plan
Bullish bias:
Above 4450 target 4465
If VIX continues going down then a breakout of 4465 targets 4475
If VIX continues going down then a breakout of 4475 targets 4490
Bearish bias:
Below 4440 target 4420
If there is a failed breakout of 4465 or 4475 target 4450 then 4440
If VIX continues going up then a breakdown of 4420 targets 4400
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. 48pts 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:
4465 - negative vanna
4461-4472 - 444.82-445.91 - $11.87B
4475 - negative vanna
4474-4487 - 446.16-447.44 - $14.76B
4490 - negative vanna
4500 - negative vanna
4502-4507 - OB (30min chart)
4504 midline
4494-4503 - 448.07-449.03 - $14.70B
4515 - negative vanna
4510-4516 - OB (1hr, 2hr chart)
4508 midline
4514-4523 - 450.12-451.03 - $16.16B
Below Spot:
4450 - negative vanna
4440 - negative vanna
4446-4440 - 443.32-442.73 - $12.10B
4420 - negative vanna
4435-4415 - OB (30min chart)
4425 midline
4425-4414 - OB (1hr chart)
4419 midline
4400 - negative vanna
4417-4401 - OB (2hr chart)
4409 midline
4412-4394 - 439.97-438.09 - $17.20B
4390-4385 - negative vanna
4416-4356 - OB (4hr chart)
4386 midline
4384-4375 - 437.18-436.20 - $26.53B
Dark Pool Levels
The highs and lows of Friday’s session produced ~$5B at the highs and another ~$3B at the lows. These will be key levels we will watch.
Above Spot:
4461-4472 - 444.82-445.91 - $11.87B
4474-4487 - 446.16-447.44 - $14.76B
4494-4503 - 448.07-449.03 - $14.70B
4514-4523 - 450.12-451.03 - $16.16B
4577-4590 - 456.43-457.64 - $10.38B
Below Spot:
4446-4440 - 443.32-442.73 - $12.10B
4412-4394 - 439.97-438.09 - $17.20B
4384-4375 - 437.18-436.20 - $26.53B
4349-4344 - 433.65-433.19 - $9.39B
4325-4292 - 431.26-427.92 - $18.46B
4214-4188 - 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.
4502-4507 - OB (30min chart)
4504 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.
This one level here on the daily is a major bullish orderblock.
4458-4375 - OB (1D chart)
4416 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 ~59.74 points. SPY’s expected move is ~6.02. That puts us at 4510.07 to the upside and 4390.59 to the downside. For SPY these levels are 449.39 and 437.35.
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:
4465 - negative vanna
4475 - negative vanna
4490 - negative vanna
4500-4555 - negative vanna
4500 - negative vanna
4515 - negative vanna
4530 - negative vanna
4550 - negative vanna
Below Spot:
4450 - negative vanna
4440 - negative vanna
4420 - negative vanna
4400 - negative vanna
4390-4385 - negative vanna
4370-4365 - 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:
4470-4485 - positive gamma
4495 - positive gamma
4560 - positive gamma
Below Spot:
4440 - positive gamma
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.