Tuesday Oct 31 2023 SPY SPX ES Actionable Levels

$SPX gets a nice bounce. But can it be more than a relief rally for $SPY?

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SPY Options
October 30, 2023

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In Friday’s letter, I wrote:

❝

“For Monday, we are still in a major trend down environment until we reclaim levels much higher.

Specifically, we will need to hold the 4105 level (near today’s low) in order to avoid a deeper sell before putting in a bottom.

If we can hold this level, or fail and quickly reclaim then we can run through 4110, 4118, 4123.

On volume we could see 4129 & 4135. This would be a great start at providing some short-term relief to the selling.

If, and a big if in this environment, if we can reclaim here and defend on any retests we can put in at least a temporary bottom to build on.

If this occurs, I could see us squeeze higher, 4145, 4153, even 4163.”

This is precisely what happened. We never lost the critical 4105 level and we reclaimed all of the levels above including 4163 closing the day just above at 4166.82.

See how well the levels work?

Now that we’ve had the bounce, what does volume and other critical measures tell us about whether this has legs or if it was only temporary?

More in the trade plan below.

The 0DTE $SPX 4175 calls ran from a low of $35 to $480 = 1271% gain.

I traded these from $50 to $70 at best sale for 40% gain. I was not available to trade at all until the final 10 minutes of the day and thought I would put a little risk on. I saved 10% in case we popped but we didn’t but overall this was still a 25% win. 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 strong. They gave us clear indication of where we may find support and resistance. Once we defended and reclaimed the critical levels from Friday’s plan we knew where we were heading. Always trust the levels!

Now we are sitting in AH right on the 4161 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.

Key Notes

This is not financial advice. This helps keep me honest and is a place for my notes. It is for educational purposes for all who choose to subscribe. Not all investments are suitable for all investors.

I try to trade less than 3 moves per day. Most days are chop and there are usually less than 3 great high confidence setups.

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