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In yesterday’s letter, I wrote:

This is where we went. We defended the level above 4690 prior to the open (didn’t even need to test 4690) and then reclaimed yesterday’s low and VWAP to run hard up through 4708 and to a high of 4726.78 (just below the 4728 level) then we sold off in the afternoon to hit a low of 4687.53 (just below key level above) before reclaiming 4690 after hours.

See how well the levels work?

Now that we have a third day of straight selling in 2024 what are the must-hold levels to prevent a proper flush? If we do defend, what targets above show the way?

More in the trade plan below.

The 0DTE $SPX 4740 calls ran from a low of $35 to $195 = 762% gain.

I traded these from $50 to $155 for 210% at best sale called out in the chat. Felt good to have a decent win after two mediocre first days to start the year. 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.

Levels from the prior letter were fantastic. They showed where we had support amongst the selling and where we found resistance on short-lived pops higher. Always trust the levels!

Now we are sitting in AH right below the 4698 key resistance level. What does this all 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.

Trading Plan

Here is a current check of the daily:

This includes all the way back to 6/29 & all overnight action.

Even deeper and we are now outside of the range built since mid-December. While we are currently trying to defend in after hours, I will need to see levels above targeted before adding risk to longs.

Quick volume check:

Less volume on another down day (but less so) gives me some indication that we are closer to the end of selling than the beginning. May need one proper spoke in volume to show the way.

Tomorrow we have NFP prior to the open and fed member speech in the afternoon.

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.

For tomorrow, ultimately I need to see us reclaim the all-important SPX level of 4704.

If we can do this (while defending 4692) then we can target 4714, 4728.

If we lose 4692 then I would want to be short for a move to 4674, 4663 as 2nd target on volume. Even 4649 possible as a third target.

The last two here could be potential longs but would want to see a big reaction that bounces us 5-8 points from those levels and we can sustain.

We could also chop between 4674 and 4704 and not really make a move.

Good news is that I don’t have to predict, I just have to have the levels that prepare me for the session and react appropriately no matter what happens. Reacting, not predicting is critical to being successful.

The volume, overnight session and open will provide the clues on where we head in the AM.

I will be trading the levels (supports & resistances posted below) and not worried about predicting in advance. Just trading the price action as I see it. The volume, # of advancing vs declining and $VIX will help guide where we are headed. I do not have to be first in or last out I am happy catching part of a move and ensuring I grow profits consistently.

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If I can help in any way, please tweet or DM me and I will get back to you. I have found joy in sharing what knowledge I have on the subject & I only charge what makes it worth putting this together daily.

If you have found success, please tweet me! I would love to hear how it is working for you.

Trade Recap

My only trade was the entry into 4740 calls. This was on the prior defense of 4695, the test of 4703 and vwap and that we had reclaimed yesterday’s low. These had me reading we could eventually reclaim vwap on ES and blast higher.

This worked out well and we got the strong move up. I was able to scale out but still keep enough to take advantage of the final blast higher.

Hindsight is 20/20 and you cannot dwell on what you would have done differently or what you feel were mistakes. No one is going to catch the entire move, or do everything perfectly. The goal is to learn from it and continue to do better each and every day.

1-3 trades per day is all you need. It’s about quality over quantity to be consistent. Trust the levels, use proper risk management and everything will be in your favor. Do more than that, you are asking to lose big.

Did I catch every move? Absolutely not, that’s not what I do.

The goal is to make consistent gains instead of swinging for the fences. Base hits, not home runs. Stay in the game as there are always more opportunities tomorrow.

Key Supports (SPX)

• 4692

• 4687

• 4679

• 4674

• 4668

• 4663

• 4658

• 4654

• 4649

• 4643

• 4638

• 4632

• 4626

• 4619

• 4614

• 4607

• 4601

• 4595

• 4589

Key Supports (SPY)

• 467.43

• 466.93

• 466.13

• 465.63

• 465.03

• 464.53

• 464.03

• 463.63

• 463.13

• 462.53

• 462.03

• 461.43

• 460.83

• 460.13

• 459.63

• 458.93

• 458.33

• 457.73

• 457.13

Key Resistances (SPX)

• 4698

• 4704

• 4709

• 4714

• 4719

• 4723

• 4728

• 4733

• 4739

• 4745

• 4750

• 4757

• 4762

• 4767

• 4772

• 4777

• 4782

• 4790

• 4794

Key Resistances (SPY)

• 468.03

• 468.63

• 469.13

• 469.63

• 470.13

• 470.53

• 471.03

• 471.53

• 472.13

• 472.73

• 473.23

• 473.93

• 474.43

• 474.93

• 475.43

• 475.93

• 476.43

• 477.23

• 477.63

Key Notes

This is not financial advice. This helps keep me honest and is a place for my notes. It is for educational & entertainment purposes for all who choose to subscribe. Not all investments are suitable for all investors.