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What we’re reading:

In yesterday’s letter, I wrote:

This is the direction we chose to go. After chopping and defending around 4885 all day we finally got the dip to 4874 on FOMC. The bounce to 4904.75 post FOMC and then the sell off to a low of 4845.49, just below the third target above.

See how well the levels work?

Now that we’ve had a healthy sell on volume, and working on retesting the highs from the Friday breakout. How much more selling is in store and what levels do we need to watch now for defense?

More in the trade plan below.

The 0DTE $SPY 487 calls ran from a low of $72 to $232 = 222% gain.

I traded these from $88 to $181 at best sale for 126% gains called out in the chat. This was my second long trade called out after first entering 489 calls a tad earlier (ended up being too early) on original defense of 4885. This position I had to defend, average, de-risk on highs until profitable. I don’t average as a rule but this trade was entered as a super small baby position so it left me some room to add to it and also hold longer than normal as the risk was small. After being profitable I held 10% of the position into the rate announcement before trading the 487’s. 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 good. We were defending where we “had to” until FOMC and then we lost it. After some chop and loss of key levels showed us the way. Always trust the levels!

Now we are sitting in AH right on the 4845 key support 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.

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Trading Plan

Here is a current check of the daily:

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

Testing the top of the breakout from two Friday’s ago!

Quick volume check:

Expected higher volume on FOMC volatility. This is healthy and while we could retest lower, we defended at a critical point and if we reclaim some key levels listed below we may be ready to bounce.

Tomorrow we have a number of reports including Unemployment.

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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