Monday July 31 2023 SPY SPX ES Actionable Levels

$SPX buyers defend and rally hard. Where are we headed next week?

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SPY Options
July 28, 2023

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In yesterday’s letter, I wrote:

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“But where we closed I believe is a very important tell. Near the end of the day we had a fast flush down to 4527 and then bounced off recovering 4532 and 4537 by end of day.

If we can hold 4539 now or fail and reclaim (as low as 4533) then I believe we can reverse course higher.

This means a reclaim of 4548 and next target 4554. If we can get into the 4560’s (past 4559 level) then we can really start a run back up. 4567, 4575 and 4583 on volume.”

This is indeed exactly what happened. The close yesterday was the tell. We indeed held that key level of 4537 and we were able to reclaim 4539 all the way up through 4583 and even a level above.

While we did not close above 4583 - we flirted with this level all afternoon.

See how well the levels work?

Now that buyers defended yesterday’s failed breakout, where does that leave us for next week? And how important is it that we did not breakout the 4583 level?

More in the trade plan below.

The 0DTE $SPX 4590 calls ran from a low of $47 to $245 = 421% gain.

I traded these between $90 and $220 = 144% gain. This was my last trade of the day. Earlier in the session I had two good call trades off failed breakdowns of two different levels. This last trade, I was not even planning to take as I was done for the day after my earlier call trades!

I also pointed out in the chat the setup for a potential put trade from up at the 4588 level. This one I didn’t take because I was done trading…or so I thought.

That would have been the best trade of the day I believe. After that I saw strength come back and we started rallying and reclaiming vwap - I then took the one above as my final trade. 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 last night were good (15 min chart). They helped get me long at failed breakdowns of levels. They also helped me spot the short that I didn’t take! Finally they got me long end of day as strength came back. Always trust the levels!

Now we are sitting in AH right below the 4583 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.

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