Big week ahead, will SPY continue its grind higher? FOMC minutes, CPI, PPI ahead. Trade ideas for Monday Oct 7, 2024
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Good morning traders!
I hope you all had a restful weekend and ready for a big week. We have a big week of data coming on Wed, Thursday and Friday banks start to report earnings.
Friday’s Price Action
Friday morning we gapped up nicely and then followed my playbook for a gap up. We sold off getting a 2 level move! Once that held, we planned for a higher low and a possible squeeze past the opening high. Both moves planned and predicted :)
With 0DTE options, timing is incredibly important especially if using OTM contracts.
One thing of concern is Friday’s push didn’t clear all time highs and the close was essentially premarket highs.
PDD we planned 155c and almost got the 56 target but sold majority from 0.15-0.25 scoops up into 0.75+. Dips continue to get bought with no relief for shorts.
OXY and XOM were of also of interest. Both rallied as expected however XOM didn’t move as far I had hoped.
Monday Premarket Action
SPY gave a failed breakout signal at 573.50 Sunday night and this more dipped to test 569.50. We may consolidate ahead of CPI and PPI later in the week. Currently basing around 570.
PDD and other china names got upgraded price targets and are gapping up. Looking for gap fill to continue to join trend for more upside. I’ll also be looking for any exhaustion into highs for possible short scalps. PDD got a whopping PT upgrade to $224 from Macquerie!
AMD and NVDA are pushing into Friday highs, a divergence from the SPY gap down. They both have big events/presentations this week. Watch for possible profit taking after, but if they impress could result in a big rally.
Let’s review the action in SPY and go over ideas for today.
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Introduction (for New Readers)
Welcome to my blog on Two Hour Trading—your daily source for market insights and trading opportunities. Here, you’ll find comprehensive market analysis, educational lessons, and trade ideas to help you excel in trading, all while spending less than two hours a day.
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Subscribers receive daily market analysis updates, educational content, and up to three trade ideas each morning based on real-life examples and my trading approach.
NOTE: screenshots from chat are from Edge Trade Planner. A platform available to THT PRO members. Join Us for live commentary and planning. Note my goal is to actively trade less than 2 hours a day finding 1 to 4 great trades a day.
What is Two Hour Trading?
Two Hour Trading is my system for finding and executing trades while spending less than two hours a day trading. My goal is to earn 100-300% on the capital I risk while waiting for 1000%+ gain trades to set up. Key benefits include:
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 04 - SPX 5700p $5 → $15.50 ($5000 —> $15500 potential)
Oct 04 - SPX 5730c $6 → $23.90 ($6000 —> $23900 potential)
Oct 04 - SPX 5740c $1.50 → $14 ($1500 —> $14000 potential)
Oct 04 - SPX 5750c $1 → $5 ($1000 —> $5000 potential)
Oct 04 - OXY 55c $0.35 → $0.80 ($3500 —> $8000 potential)
Oct 04 - META 595c $0.12 → 1.90 ($1200 —> $19000 potential)
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 Friday Oct 04
GOLD BOLD ITALIC = price action signal
GOLD REGULAR = action to take/taken
GREEN REGULAR = trades I should have taken
SPY / SPX
Be sure to review the Price Action Signals above and the actions taken.
the morning was hectic with fast moves, and then we just need to be patient for the action after 11am to give us positioning for the long. The double bottoms and dips in the afternoon gave amazing entries to join for the rally to the upside.
Notice the triple top that formed between 12pm and 1:30pm. look what happened at 3pm when that cleared. We got a a squeeze. If learn to anticipate that, you can get amazing entries.
Remember for me it is less about being right on every trade and more about can I position for amazing reward for the risk I take IF I’m right.
If you want to take trades for big picture, consider paying more but after 11 or 11:30am and leave orders to scoop for less if a dip comes. Be sure to use near in the money strikes and size to risk 100%. If right, you should make 100-300% and if wrong you lose it all. With options, especially 0DTE, your perfect entry may be right but if the timing is off the price can drop as much as 50-90% before it gets to your target price. Have a plan and a process. I will typically sell 50% at 100% gain and then I’m free to let the rest ride for the bigger gains. Check out SPX 5730c.
We got in at $6 it ripped to $12 before dipping to $2.65 and ultimately getting to the $16+ target from the generated plan in Edge.
If you are busy and want to see my commentary and ideas in real time consider joining THT-PRO.
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 Monday Oct 07
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, AMD today!
Ideally today turns into a consolidation day and maybe even expands the range to downside a little bit while we wait for data on Wednesday.
Let’s go over the ideas…