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In yesterday’s letter, we wrote:

This is what happened. We initially lost the critical 7465 SPX support, which was a major signal for a short entry. After rejecting a retest from below overnight, we saw a swift drop to the 7405 level, where we found support and bounced back. Throughout the regular session, we defended that 7405 level once again, allowing us to recover to 7420-with multiple tests and bounces here, then 7435, before getting rejected at 7451 (high of day 7454.85). $SPY ( ▼ 1.2% )  $SPX ( ▼ 1.24% )  $ES_F ( 0.0% )  

See how well the levels work?

Crash Expert: “This Looks Like 1929” → 71,105 Diversifying Here

Mark Spitznagel, who made $1B in a single day during the 2015 flash crash, warned markets are mimicking 1929. Seems extreme but we did just see the worst quarter for the S&P since 2022.

So it’s not so surprising that Vanguard and Goldman Sachs forecasted 5% and 3% annual S&P returns respectively for 2024-2034.

Late last year, Apollo’s chief economist Torsten Slok put it this way: "expect zero in return in the S&P 500 over the coming decade."

So, what’s something investors can actually do to diversify this week?

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Now, looking ahead, the market is at a crucial juncture. What levels should we be watching for potential reversals-and where must we hold now?

More in the trade plan below.

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

The loss of 7465 led to a massive drop and then the multiple tests and bounces off the 7420 level are both prime examples of the supports at work. Always trust the levels.

Now we are sitting in after hours right on the key 7405 support level. What does this mean and where do we go from here? Read below for our 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.

If you are enjoying this letter, consider sharing with a friend! We even have a referral program where you can earn free subscription time for referring others that sign up for a paid subscription.

Don’t miss the Topic Directory - Getting lots of questions that are answered in here.

There seems to be some confusion as to the premium subscription and the discord chat. If you are premium and you do not have access to the “Premium Members Only” channels including “members-only” please authenticate yourself in the “bot-request-premium” chat. Or send me a DM in the discord!

Also - if you missed it - join our chat during market hours for premium subscribers. We are now leveraging discord for this. Link is at the very bottom of premium content: Trading Plan section below.

Trading Plan

Today’s market saw a significant 1.25% decline, which indicates a strong selling pressure, especially given the high volume.

As we look to Monday, we have a lighter day in terms of scheduled reports; however, it marks day one of the G7 summit. It’s important to stay alert for any global news that could impact market sentiment over the weekend. Be prepared for potential volatility as these developments unfold.

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

In fact, we’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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