Wednesday Dec 13 2023 SPY SPX ES Actionable Levels

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In yesterday’s letter, I wrote:

This is exactly what played out. We had a great pop on CPI that was rejected and quickly sold off. Then we continued selling after the open all the way to a low of 4608.09 and then reversed. We ended the day higher at 4543.70, just below the second target.

See how well the levels work?

While everyone was jumping in to short the market at the days lows, I was cautioning that we may defend and reverse here and that we should wait for confirmation. I used this plan and knowledge to enter calls.

With FOMC up next, what key levels do we need to hold to keep the rally alive and what targets are above us?

More in the trade plan below.

The 1DTE $SPY 462 calls ran from a low of $131 to $292 = 123% gain.

I traded these from $148 to $178 at best sale for 20% gain. This was my only trade of the day called out in the chat. I actually traded 1DTE because I wanted the opportunity to swing some. Instead I got stopped out on the remaining runners on a dip. Could have done better with 0’s in the same period or if I was able to hold onto the runners they would have been a fantastic trade. 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 beautiful. When we defended the key levels (notably the breakout from Fri/Mon) it was clear we were heading higher. I used this and the plan from yesterday to get long. Always trust the levels!

Now we are sitting in AH right under the 4651 key 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 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.

Trading Plan

Here is a current check of the daily:

This includes all the way back to 3/30 & all overnight action.

We just had a contract roll so this breakout is not as grand as it may appear. We defended the breakout today and blasted higher.

Quick volume check:

The high volume (albeit less today) supports the rally.

Tomorrow we have PPI in the AM but all eyes are on FOMC for later in the 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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