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In yesterday’s letter, I wrote:

This is what happened. After a brief attempt to hold at 5482, the level ultimately failed and opened the door for a significant downward move. The loss of 5482 was a critical point, and once it was breached, we saw a flush down that reached a low of 5410.42 before any signs of recovery.

See how well the levels work?

Now that we are firmly back in the range we just broke out from yesterday, where do we go from here? How much deeper must we retrace ? What targets and supports below will point our way and what does volume say?

More in the trade plan below.

The $SPX 1DTE 5400 puts ran from a low of $70 to $2846 for 3,966% gain.

I initially traded long, believing that 5482 may act as a defense. I managed to take a decent bounce and closed most of my positions, leaving a few runners which ultimately resulted in a loss. However, when it became clear that 5482 was not holding, I pivoted and went short with these puts from $750 to $1800. More in the trade recap below.

Below, we’ll cover the actionable levels, how I played them today and what they mean for the next session.

The levels played out as expected; the loss of the critical 5482 support led to a significant move lower. We had a brief defense at that level, but the flush continued as traders reacted to the breakdown. Always trust the levels!

Now we are sitting in AH right above the key 5419 support level. What does this mean and where do we go from here? Read below for my trade plan which includes actionable support & resistance levels, outlook for the next session and today’s trade recap.

Learn the system to make 1-3 low risk, high reward trades per day using SPY/SPX options.

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Trading Plan

Here is a current check of the daily:

This includes all the way back to 1/5 & all overnight action.

This massive move down on the daily chart puts us right back into the range we broke out of only yesterday.

Quick volume check:

Volume was off the charts -what you would expect for a massive down day (down 1.4%). Only 2 other sessions this year had greater volume.

Tomorrow we have a light day for data or scheduled events compared to earlier this week, with really only employment data prior to the open.

I am receiving some great questions from beginners. This is helping me develop guides for this group as well as the course. More to come but I’ve created a separate channel in the discord just so you can not be shy about bringing those questions to the group. No question is dumb, we grow stronger together!

In fact, I’ve created this single resource as a guide. It is a living document and we will continue updating it. You must be logged into the site to read it:

https://letter.spyoptionsactionablelevels.com/p/strategy-guide-the-basics

As readers know trading after a massive move in either direction is risky.

Trying to predict when trend will break is a fool’s game because the trend can be stronger than you ever realize.

Going with the trend is hard because it has already run so far (or dropped) and move may be close to over.

All you can do is pick your entries carefully and with proper position sizing. Trading out 1-3 DTE or further also helps soften the blow.

Yes it will decrease the amount of profit but will greatly help keep you in a trade long enough to see return.

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