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What we’re reading:

In Sunday’s letter, I wrote:

This is what happened. We had a multiple defenses of the SPX 4753 level overnight and then had a failed breakdown prior to the open and then another shortly after the open that launched us 30+ points higher.

See how well the levels work?

After a rangebound day and then a selloff of most of the morning rally and then a jump into the close, where do we head from here? Are we still on the path to new all time highs? What does volume tell us?

More in the trade plan below.

The 2DTE $SPY 474 calls ran from a low of $196 to $360 = 84% gain.

I caught these from $220 to $355 for 61% called out in the chat. It was a beautiful failed breakdown of the key must hold level and had to try the long. 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 amazing. I wish we had broken through and held 4780 and we could have made higher highs but it was clear that it was tough resistance and we ultimately tested lower. The failed breakdown of the must hold level was a great long entry. Always trust the levels!

Now we are sitting in AH right below the 4763 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.

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Trading Plan

Here is a current check of the daily:

This includes all the way back to 6/29 & all overnight action.

A lower high and lower low. After Friday’s doji candle, I am cautious that we continue this range expansion and test lower.

Quick volume check:

Volume has picked up on this sell lower. I am even more cautious that we have to fill out lower before we can make another test to new all time highs.

Tomorrow we have retail sales before the open and many FOMC member speeches during the trading 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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