Wednesday May 8 2024 SPY SPX ES Actionable Levels

$SPX chops around. Which way will $SPY break?

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In yesterday’s letter, I wrote:

For tomorrow, I am closely watching the key SPX levels of 5152 & 5123.

If we ultimately don’t lose 5123, and super bullish if we don’t test or fail 5152, we can continue on up.

A long opportunity on a test or dip below and reclaim of 5165 could be noteworthy.

Then we can target 5198.

This is what happened. In futures we never got down to test the 5152 SPX level. This led to a rally through the levels to 5198 (high of 5200.23).

See how well the levels work?

Now that we’ve continued the move higher and chopped around, where do we head from here? Was this enough of a retest and defense or do we need to see a deeper retracement? Where must we hold to continue higher?

More in the trade plan below.

The $SPX 0DTE 5190C ran from a low of $65 to $480 per contract = 638% gain.

After trading futures for small scalps, I traded these late in the day from $100 to $220 - I had my limit sell placed there and if I didn’t have a sell order in place I would have been able to sell for much more! I was not able to call these out unfortunately as I was mobile at the time. 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 fine. Since we never lost or tested the key levels listed, we knew we could head higher. It was very choppy and difficult to trade due to the tight range. Always trust the levels!

Now we are sitting in AH right above the key 5187 support level. What does this 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 10/4 & all overnight action.

A higher low and higher high. But a tight range and lots of chop.

Quick volume check:

A bit more volume today but still very low. Need to see a strong move on high volume for confirmation.

Tomorrow we have multiple FOMC member speeches and 10 year bond auction during the regular session.

I am receiving some great questions from beginners. This is helping me develop guides for this group as well as the course. More to come but I’ve created a separate channel in the discord just so you can not be shy about bringing those questions to the group. No question is dumb, we grow stronger together!

In fact, I’ve created this single resource as a guide. It is a living document and we will continue updating it. You must be logged into the site to read it:

https://letter.spyoptionsactionablelevels.com/p/strategy-guide-the-basics

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, I am closely watching the key SPX levels of…

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