Can SPY hold 495? What's next for SMCI and NVDA? Plan for Wednesday Feb 21
Can SPY hold 495? What's next for SMCI and NVDA? Plan for Wednesday Feb 21
FOMC minutes at 2pm. How will market react?
Good morning traders.
Yesterday I wrote that I had a bearish bias since 500 broke and we are at the beginning stages of a corrective move. I also mentioned in the Paid Member Idea section I expected sub 700 on SMCI and 495 on SPY to be tested. Both ideas played out nicely and targets were met. My biggest gripe is that we didn’t get a pop and push to fill some of the gap to get contracts really cheap.
SPY gave a push in the afternoon and this morning it back testing the 495 support area.
Given the 2 hot reports last week, the market will likely chop around while waiting for FOMC’s minutes to give direction.
In today’s blog I’ll cover yesterday’s price action, my trades, thoughts on SMCI and NVDA, and finally ideas for today and this coming week.
Introduction (for New Readers)
Welcome to my blog on Two Hour Trading, your daily source for market insights and trading opportunities. In this blog, I will provide you with a comprehensive analysis of the market, educational lessons, and trade ideas to help you stay ahead in your trading journey and best of all doing it less than two hours a day.
What Subscribers Get
Subscribers to this blog will receive daily updates on market analysis, educational content, and up to three trade ideas, all based on real-life examples and my personal approach to trading.
NOTE: screenshots from chat are from Edge Trade Planner. A platform available to my THT PRO and ELITE 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?
It’s 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 setup. Key benefits:
High Quality trades with great reward vs risk
Avoid Overtrading and losses from it
Trading to Win vs Trading to Not Lose
Stacking the deck in your favor
2024 Alert Leaderboard
(I’ve decided to include a leaderboard so you can see what potential the 2 Hour Trading System has)
The following is based on entry alerts.
Feb 16 - SMCI 1000p Entry $11 - High after $195 ($1100 → $19500 potential)
Feb 15 - TSLA 195c. Entry $1.20 - High after 5.95 ($1200 → $5950 potential)
Feb 14 - NVDA 720p. Entry $4.5 - High after $12 ($4500 → $12000 potential)
Feb 13 - SPX 4955p. Entry $5 - High after $34 ($5000 → $34000 potential)
Feb 12 - ARM 180c. Entry $1.20 - High after $14.10 ($1200 → $14000 potential)
Feb08 - ARM 100c. Entry $5 - High after $27.50. ($5000 → $27500 potential)
Feb07 - TSLA 185c. Entry $2.53 - Hight after $5.60 ($2530 —> $5600 potential)
Feb05 - SPX 4940c. Entry $3 - High after $16.60 ($3000 → $16,600 potential)
Feb02 - AMD 180c. Entry 0.15 - High after $1 ($1500 —> $10000 potential)
Jan 29 - SPX 4910c. Entry $1 - High after $20 ($1000 —> $20000 potential)
Jan 26 - NFLX 570c. Entry $0.50 - High after $9.85 ($500 → $9850 potential)
Jan 25 - TSLA 185p. Entry $1.5 - High after $6.3 ($1500 → $6300 potential)
Jan 24 - SPX 4890p Entry $1.50 - High after $22 ($1500 → $22000 potential)
Jan 24 - SPX 4880p Entry $0.50 - High after $12 ($500 → $6000 potential)
Jan 17 - SPX 4740c Entry $0.20 - High after $2.80 ($200→ $2800 potential)
Jan 17 - SPX 4740c Entry $1.20 - High after $12 ($1200→ $12000 potential)
**Past Performance is not indicative of future results
Tuesday’s Price Action (Education)
You don't try to make $100,000 ...You don’t start by saying, I’m going to make the biggest most profitable trade and turn $1000 into $100,000 and fix all my bad trades before.
You say, I’m going to plan and execute 1 trade as perfectly as I can today. You do that every single day, and soon you'll have a $100,000 and likely much more!
SMCI
When I wrote yesterdays blog SMCI was around 825 and I was praying for a push on 860 on the open so we can short into 700 or less. Unfortunately the SMCI gapped down by the open. So what do you do?
The premarket lows around 766 was quickly broken in the first 15 minutes. We then look for an entry near vwap / previous levels. Hey look at that we got a back test right to the 766 level again and test of vwap. We then target 2 to 3 levels down so we expect 715 to 660 to come. We got 692! This let me capture about 60pts of the move. I chose to trade 650 and 600 puts because the contracts were so expensive.
Notice the peachline at 702.46? once we made a new low and that was reclaimed, I locked all my puts and called it a day. Over 700 I expected 750+ to come. I was about to get short at 770 when I thought it might squeeze once more and quickly grabbed 800c for $44 targetting $55 for the exit scalp. It pushed to $57+ :). nice 20 minute trade.
The after noon ramp imho is a relief bounce and the 700 levels was a BTFD spot. Overall I still think 600 is coming if we get a negative reaction to NVDA tonight.
SPY
Got a small opening pop and break of 497.50. This provided a nice short setup targeting 495 level and 2.50 of room
So similarly got an hour of selling and then a bid, but the bids could barely hold 497 leading to a flush into 495 during the lunch hour.
A long off the 495.20 reclaim was possible given 495 is a major support level and first test of the level. One should target a level above. I didn’t take this trade as I had met my daily goal for the day in profits and under 2 hours of trading.
Summary Review of Market Price Action
Overall the action showed market weakness while also waiting for FOMC today and NVDA earnings tonight.
Educational Lessons
From the price action review you should have learned the following:
Use the levels to plan targets
On day 2 reversals and gaps use first vwap test to join trend.
Trade Ideas - Plan for Wed Feb 21
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.
Market is gapping down. The primary stocks I’m watching: SPY, PANW
In theory the next 4-6 weeks the bears will rule, so I will use any rallies as an opportunity to short (as long as SPY does not reclaim 500.50)
Read on for my thoughts/plan.