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What we’re reading:

In yesterday’s letter, I wrote:

This is what happened. We were testing 4741 even prior to the open with defenses and failed breakdowns. Then we bounced higher 2 hours before the regular session and failed prior to the open. An hour and a half into the trading day we tested from below one final time before dropping all the way down to a failed breakdown of 4719 where we recovered and then ran the levels back to close just under 47471.

See how well the levels work?

After another choppy rangebound day where do we head from here? Are we still on the path to new all time highs? What does volume tell us? And what key levels are must-hold below and targets above to put the low in?

More in the trade plan below.

The 1DTE $SPY 472 puts ran from a low of $101 to $257 = 154% gain.

I caught these from $161 to $180 for 12% called out in the chat. This was my first of two trades. I then scalped a call for a bit better return but then hung it up. Turns out, I was good on the put trade but we ended up bouncing back to the 4741 must hold level first and then we really started the sell. Happy to save the mental stress on a chop day and save bullets for better action. 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 great. We clearly lost 4741 and then failed a reclaim in the morning. After that we saw the low of the day & failed breakdown of the 4719 key level for a blast higher into the close. Always trust the levels!

Now we are sitting in AH right on the 4733 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.

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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.

A lower high and lower low. We continue on the path to test the lower end of this range before making a decisive move in either direction.

Quick volume check:

While volume is less than prior session it is higher on this sell off and in line with recent days.

Tomorrow we have unemployment claims prior to the open as well as FOMC member speech before open and mid-day.

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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