Wednesday Dec 6 2023 SPY SPX ES Actionable Levels

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In yesterday’s letter, I wrote:

This is what happened, and we kind of had an all of the above play out! Overnight we defended the 4550 level multiple times. Then after the open we reclaimed levels and blasted higher on data to a high of 4578 and then fell all the way down to an intraday low of 4555. We were unable to reclaim the 4575 level as noted and we chopped remainder of day between the range.

See how well the levels work?

Now that we’ve consolidated for a day after the dip, defended the lows on the daily and printed a dojo candle, what clues tell us where we head from here? Plus, how significant is the defense of key level end of day and what does volume show?

More in the trade plan below.

The 0DTE $SPY 456 calls ran from a low of $50 to $173 = 246% gain.

I traded these from $89 to $130 at best sale for 46% gain. This was my only trade of the day called out in the chat. I wanted to wait for data to drop before entering and already had the calls ready to go. Wish I had kept a set of runners a bit longer but never going to catch it all. 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 good. Again, I wish we had crossed more of them! The multiple defenses of a key level was a clue where we were headed, that along with the reclaim of levels got me long at the right time. Watching for key rejections at resistance the levels showed we were locked in for chop. Always trust the levels!

Now we are sitting in AH right under the 4567 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.

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Trading Plan

Here is a current check of the daily:

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

Today we put in a higher low and lower high and printed a doji candle.

Quick volume check:

Significant volume persists. More than prior day’s drop.

Tomorrow we have some data released prior to the open. The big one are the employment #’s.

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.

For tomorrow, we are practically unchanged from yesterday and in fact just like yesterday have slipped below this 4567 level in after hours.

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