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What we’re reading:

In yesterday’s letter, I wrote:

This is what happened. After basing overnight we tested above and below 4855 prior to the open. At the open we lost 4855 and sold off to 4846, low of 4844.37 and then rallied up through 4855 to 4866.48 into the close just below the 4873 level. We actually breached this key level after hours.

See how well the levels work?

Now that we’ve blasted higher without a full retest, how much further can we run?

More in the trade plan below.

The 0DTE $SPX 4865 calls ran from a low of $35 to $420 = 1100% gain.

I didn’t trade these, but I did think about it as we started defending ES VWAP and moved up through 4855. I did catch that move in ES futures contracts. 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 great, we got the rest of the must hold level, defended and squeezed higher end of day. Always trust the levels!

Now we are sitting in AH right on the 4870 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.

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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.

We made the higher high and higher low. It looked like a choppy mess until the test and defense of the 4846 must hold level and then reclaim of 4855 “must reclaim” level and then we blasted higher.

Quick volume check:

Significantly lower volume today. After such a large move, this is reassuring that price is holding up and there are not a flood of sellers. I would like to see more participants on the next trend up day to confirm buyers are still here.

Tomorrow we have PMI and Oil during market hours.

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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