Thursday Oct 19 2023 SPY SPX ES Actionable Levels

$SPX breaks down. Where do we head from here and what key levels show the way for $SPY?

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SPY Options
October 18, 2023

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In yesterday’s letter, I wrote:

❝

“For tomorrow, as long as we continue holding the 4346/4338 levels we can continue filling out this range and eventually breakout…

I would not be surprised to see us test 4346 or 4338 again. But as long as we hold or dip below and reclaim it is a long opportunity. Just as it was today.

If we lose 4338 by 5 points then I will be looking for opportunities to short down to the low 4300’s.

First 4332, 4326 and 4320. 4314 and possibly 4306 on volume.”

This is precisely what happened. Initially we tried defending the 4338 level but as the day wore on we continued hitting supports beneath and eventually failed 4332, 4326 and 4320 - we even tested the 4306 level as noted above (low of the day was 4303.84).

See how well the levels work?

Now that we lost the 4338 and failed multiple levels below, is this a dip that can be bought? And what key levels show us the path higher or even lower?

More in the trade plan below.

The 0DTE $SPY 434 calls ran from a low of $22 to $84 = 282% gain.

I took this trade prior to the low & run listed above from $68 to $83 at best sale for 22%. This was my only trade and called out in the chat. Do I wish I had waited for the larger move and played the short on the failure of 4338 (which was the plan written the day prior) sure, but I didn’t know if/when that would happen. All I could do was trade what at the time looked like a defense of that very level. 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 mighty fine. When we finally broke 4338 and then bounced and rejected again right off for a final time and then lost 4332 I knew we were heading lower. I was already done for the day and committed not to trade again! Have to stick to the rules to be consistent. They did guide my long entry on defense of the 4338 level earlier in the day though. Always trust the levels!

Now we are sitting in AH right on the 4315 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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