Friday October 4 2024 SPY SPX ES Actionable Levels

$SPX dips, defends and chops yet again! How much more consolidation for $SPY?

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In yesterday’s letter, I wrote:

For tomorrow, I am closely watching the key SPX levels of 5707, 5695, and 5737.

We may not be done with the selling. I’m watching 5707 first to see if it defends again, and if not, I would short below 5695 by 5+ points. Then, target 5682 and 5667 first…

This is what happened. We opened the day with significant volatility, and as anticipated, the 5707 level was not defended. Following this, I shorted what I believed was the failure of the 5695 must-hold level. This short entry worked out OK, although it was not without some chop. We ultimately fell to a low of 5677.37, just below the 5682 support target I had outlined.

See how well the levels work?

Now that we chopped again but ultimately defended the lows into the close, where do we go next? Are sellers not done? What key supports must defend if we want to continue to push higher?

More in the trade plan 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 perfectly as the failure at 5695 triggered a significant move down. Although we bounced back later, recovering much of the drop, the initial direction was clear. It was a good reminder of how well the levels work. Always trust the levels.

Now we are sitting in AH right below the key 5700 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.

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Trading Plan

Now that we have printed another daily red candle that defends the lows, where do we head from here? With volume a bit stronger than it has been, tomorrow's employment data before the open could present another opportunity for traders. Additionally, one FOMC member will be speaking just before and during the open, meaning we could see continued volatility based on their comments.

Keep an eye on the key levels as we move forward, and remember to stick to your trading plan amidst the potential market reactions.

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.

For tomorrow, I am closely watching the key SPX levels of…

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