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In yesterday’s letter, I wrote:

This is what happened. The market opened and immediately defended the key level of 5197, which was crucial for our bullish outlook. We then reclaimed 5218, triggering a significant squeeze that carried us all the way to a high of 5312.34. This movement fit perfectly within the levels I had highlighted, demonstrating the strength of our analysis.

See how well the levels work?

Now, with the market closing near the lows of the day after such a strong rally, where do we go from here? What does the volume tell us about potential continuation or a reversal?

More in the trade plan below.

The 8DTE $SPY 525 calls ran from a low of $586 to $1004 for 71%

I traded these calls, entering at $667. I was pleased with the trade, capturing a significant portion of the move as we rallied through the levels. 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.

The levels played out great, with a solid defense of the 5197 key level, which we needed to hold to avoid a bearish scenario. The reclaim of 5218 was the catalyst for the massive squeeze up to 5312.34, perfectly aligning with our expectations. Always trust the levels!

Now we are sitting in AH right above the key 5231 support level. What does this 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 1/5 & all overnight action.

On the daily chart, we put in a defense but then closed near the lows of the day, indicating that the session was not as productive as it could have been.

Quick volume check:

Volume was much lower today during this defense/squeeze day, which may point to potential exhaustion.

Tomorrow is a lighter day with a 10-year bond auction scheduled for the afternoon. We should watch for any potential volatility that could arise from that event as it may influence market sentiment and direction.

I am receiving some great questions from beginners. This is helping me develop guides for this group as well as the course. More to come but I’ve created a separate channel in the discord just so you can not be shy about bringing those questions to the group. No question is dumb, we grow stronger together!

In fact, I’ve created this single resource as a guide. It is a living document and we will continue updating it. You must be logged into the site to read it:

https://letter.spyoptionsactionablelevels.com/p/strategy-guide-the-basics

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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