Thursday May 4 2023 SPY SPX ES Actionable Levels

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In yesterday’s letter, I wrote:

“FOMC could bring us down … and we break lower out of this range for more downside in the weeks to come. This could all happen at the very end of the day. We could push higher during the day and even during the presser and then end the day dumping below…If I had to choose, we have had trouble making new highs for the year (even though we got close yesterday!) and this move before FOMC after a move to the bottom of the range last week has me feeling like we are rolling over…The loss of 4100 would bring up 4094/4087 and from there we could sell to 4069, even 4051 potentially.”

This is the direction the market headed post FOMC. While we have yet to hit the last two levels, we could be well on our way for tomorrow and Friday. In fact, the sell off has accelerated even further in AH on regional bank fears and broken the 4081 level from today.

In the morning, the market tested 4149 several times before breaking 4139 and losing 4125 the significant level.

Post press conference the sell off accelerated and hit an intraday low of 4088.

We lost the key level, the significant downtrend line from the Aug ‘22 & Jan ‘23 highs. After hugging above and below this key level for most of the day the afternoon sell off left that in the rear view mirror.

More in the trade plan below.

The 0DTE $SPX 4090 put ran from an recent low of $60 to $600 per contract. - 900% gain.

I traded these, and while choppy, I caught a decent run of the move. Traded them from $135 to $410 = 204%. This was after trading calls in the morning prior to the rate decision. I had a few more put trades that I scalped quickly after this one. Additionally I put on a lotto call position for the chance of a reversal which is what we had the last two FOMC’s. This time it didn’t work out but that’s why you have to be flexible! More in the trade recap below.

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

Levels from last night were good (15 min chart). They allowed me to get some nice call scalps in the AM prior to the rate decision release and then when it was a clear trend down post presser scalps puts. Always trust the levels!

Now we are sitting in AH right under the 4081 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 tomorrow’s session and today’s trade recap.

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