Wednesday July 19 2023 SPY SPX ES Actionable Levels

$SPX squeezes and breaks out to new 52 week highs again. How much further can we run & what level starts a cool off?

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SPY Options
July 18, 2023

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In yesterday’s letter, I wrote:

❝

“Here is my plan for tomorrow.

If we can come down to test the 4507 level I would consider a small long position if we defend or have a failed breakdown. Ideally I would like to try the long at 4498-4500.

If we can hold 4507/4498 then we can continue higher. First 4520, then 4526. Once we break out there we can hit 4534, 4541 and 4549 with volume.

If we somehow punch all the way to 4554 I would think about puts, as I think we will get some sort of reaction in that area, even if short-lived.”

This is exactly what happened. We were able to hold 4507 overnight and defend a failed breakdown of 4520 at the open. It was all up from there as we squeezed all the way to 4562.30, only 30 cents over the key resistance level posted last night.

See how well the levels work? They told us all day that they were defending and ready to blast higher.

Now that we have broken out, but closed at the 4554 zone is it time for a cool down? What level tells us this is in play and what are key targets for tomorrow?

More in the trade plan below.

The 0DTE $SPY 452 calls ran from a low of $18 to $285 = 1483% gain.

I traded these between $43 and $52 and sold $91 = 112% gain. I also traded longer dated 7/21 455 calls later in the day for a nice gain. At the very end of the day, I opened a very small put swing position and will talk more about later. 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 last night were fabulous (15 min chart). They kept me out until we had a retest of a major level and then reentered on a failed breakdown. They also helped me scale out as we reached next level up. Always trust the levels!

Now we are sitting in AH right under the 4554 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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