3 Days of tight consolidation. Will SPY reclaim 570 today? SPY, oil and China names gapping up. Trade ideas for Friday Oct 4, 2024
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Good morning traders!
What a day yesterday! The Playbook scanner started working but the plays it found were not good. It was right about some stocks nearing exhaustion but they didn’t actually give a 2 level reversal. For now, I’ll just glad it gave me a heads up to look. And once I have confirmation signals developed that will help with knowing to pull the trigger or not. Reminder not all ideas and plays it fines will work. There is still some art to trading, but it helps alleviate a lot of the work to be watching many tickers.
Thrusday’s Price Action
Yesterday amazingly turned into day 3 of consolidation. When SPY finally broke 566, I was excited for the next leg down coming, but it din’t follow through and I had to lock in my gains. It’s frustrating but by being systematic one can secure profits while preparing for when the big payout comes.
On the flip side, the failed breakdown also become a clear signal to go long and some THT PRO members did just that.
Overall the levels for SPY yesterday were spot on. I normally want a 2 level move, but during consolidation a 1 level move is perfectly fine and the levels make it easy. On top of that when you recognize this is the situation, you can sometimes plan for 3-5x payout trade in SPX in the last 2 hours of the day. We did just that!
PDD as I said, I’m looking for the next extension up and so when it dipped yesterday to fill the gap I took some 155c around 151 thinking we could see a 160+. So far its gapping up $5. This is an amazing rally since I mention the stimulus last week. (up over 50% in less than 2 weeks!)
OXY and XOM were of interest yesterday, I decide to yolo calls into support / dips on news of seeing risk/reversal long bets were being created. OXY is beat up while XOM is near highs and could make new ones.
TSLA filled the gap yesterday. We were able to add to the calls at open and I alerted I was exiting at 249+. We pushed right there and failed. I unfortunately did not flip short though. TSLA sold off and broke 241, dipping into 238.
Friday Premarket Action
As of this writing, SPY, China and oil names are all gapping up. 566 was a triple bottom and yesterday gave another failed breakdown. I’m looking for dips for a possible reclaim over 570 and 571.
Let’s review the action in SPY and go over ideas for today.
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High-quality trades with excellent reward vs. risk
Avoiding overtrading and losses from it
Trading to win vs. trading not to lose
Stacking the deck in your favor
2024 Q4 Alert Leaderboard
Here's a look at some of the potential gains achieved through our entry alerts:
Oct 03 - SPX 5655p $1 → $5 ($1000 —> $5000 potential)
Oct 03 - SPX 5690c $2 → $14.20($2000 → $14200 potential)
Oct 03 - SPX 5695c $1-2 → $9.80 ($1500 → $9800 potential)
Oct 03 - NVDA 125c $0.55 (swing)
Oct 03 - XOM 123c $0.22 (swing)
Oct 03 - OXY 55c $0.33 (swing)
Oct 03 - PDD 155c $1.20 (swing)
Oct 03 - SPX 5720/25 bear calls $2 —> 0 (risk $500 to collect $2000 premium)
Oct 02 - SPX 5700p $2.50 → $8.50 ($2500 —> $8500 potential)
Oct 02 - SPX 5720/25 bear calls $2.50 —> 0 (risk $500 to collect $2500 premium)
Oct 01 - SPX 5720p $3 → $12 ($3000 —> $12000 potential)
**Past Performance is not indicative of future results
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Trade Recap for Wed Oct 03
GOLD BOLD ITALIC = price action signal
GOLD REGULAR = action to take/taken
GREEN REGULAR = trades I should have taken
SPY / SPX
Guys remember about being systematic? On the run p back to 569 I alerted members of my plan to short SPX 5655 for $1 and 0.50. At the time they were $2-3 I believe. Based on my targets I was thinking I could sell 5655p for $5-12 depending on if we flush to 5650 or not by end of day.
When SPY hit 565.80 level it pushed to $4-5, I was about to hold it all for the bigger gains and then I remember the intrinsic value of 5655 and 5650 is $5. I’ll take that gains and made sure to raise stops. Overall I’m incredibly proud of the planning on this trade. I targeted 0.50 to $1 for the scoops. dipped to 0.70.
Here is what you need to learn. After the rejection 5655 spiked to 1.50-1.80 I think but then dipped back to $1 before continuing to $5. So you can wait for the fail and then discount shop the entry for the big payout. this was a 200-400% payout based on where you put sell orders.
At his point contracts were too juiced to get short at vwap and I left thinks for the last 30minutes. At that point I liked calls for a push back on vwap and possibly a run back to 568.50.
This where the massive trade came in that I botched by selling too much too soon. I alerted I wanted SPX 5695 for $2 and risk 100%. it dipped to 2 and then down to $0.80 and I added a lot more there to get average to 1.10. send sold half at 1.50 to pay for risk. (stops at 0.70). Then sold more at $3 and a bunch at $6 leaving 20% in case $10+ cam. I was annoyed I sold the 50% at 1.50. but on retrospect, it was the right thing to do given the size up. I had a sell order for 10% more at $10 but it missed it spiking to 9.80 and dipping down to 4.90 at the close.
Overall by planning for the vwap rip off the 10:30 566.50 support level into the close was magic!
Overall since we have a triple bottom at 566 and 2 failed breakdown there, I’’m leaning toward seeing 570+ today.
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Education - How to Join a Strong Trend
The process I typically follow for joining a strong trend are as follows:
All day grinder: join on dips to 20ma
Multi-day grinder:
Join either on support test of morning lows/failed breakdown reversal
Join at vwap mid day or end of day
Keep it simple. Don’t chase, wait for support levels for great risk/reward entries!
Education - Systematic Profit Taking
How do I take profits? I keep it relatively simple. Depending on the entry and range to the next levels I typically with take profits 50-100% of my profits at 3-10R and then raise stops to above entry with a goal of letting runners take me to the next level or 2 and to then reload if I believe we are consolidating before the next leg.
I then repeat the same process on the reload.
Let me know in the comments if you have questions or would like to see examples, I’ll share them.
Trade Ideas - Plan for Friday Oct 04
Stick to process. The process and trade setups I teach works. Rinse and repeat over and over again. There will be losses. Any good system will have them. Being systematic also means the gains will repeat and come again too. If you keep changing your system/process trying in an effort to never lose a trade, you will never get to where you want to go.
Ideas
Watching SPY, PDD, MSFT, OXY and XOM today!
Overall would like to see weak open and then r/g for push over 570+ on SPY
Let’s go over the ideas…