CPY rallies after CPI to new all time highs! Can it keep it? Trade Ideas for Wed Aug 13
Wow! Perfect dip read and plan from yesterday's blog! SPY followed it to the letter!
Good morning!
Yesterday I wrote… “I like 637 for a long on SPY”. What happened? SPY dipped perfectly giving a double bottom/failed breakdown right at 637!
What does that mean? and how do you plan a trade from that? I’ll go over it in the blog below.
SPY/SPX
Morning Setup: Dip and RIp off planned level
OK so after CPI numbers came out market was acting net bullish. WE DO NOT WANT TO CHASE we want support to be established.
I missed the long entry on 6420c for 2.50 on that 637 dip because I was dealing with META, but that is ok. With a thesis of 641-643 coming I need to get long at the next spot. I like waiting for the first hour to complete.
That next spot was the basing on 639. I alerted scooping 6420c for $5 and then shared this sell plan.
I sold too much too soon due to the chop the day before and I was thinking we would get a lunch time pullback. Nope. It turned into an all day grinder.
So how did that sell plan generated by Edge Trade Planner do?
My execution wasn’t the best so I need to work on holding for all day runners, but I struggle to do that after recent days had each met with selling.
That is fine. I collected well over 100% gains with size. that was my major goal. leaving 20% for runners would have double the gains but that is ok.
The only thing to do different was to not raise the stops on last 10-20%. But until we saw more price action, there was no conviction I wouldnt get a pull back and massive decay on the premium.
I made a secondary plan to scoop SPX 6430c for 0.50-1 target exit 3-7.
Unfortunately these only dipped to 1.5 but they did eventually hit $7 by end of day.
I waited for a pull back in the afternoon but no additional trade developed.
The great thing is no one in the THT PRO group took a short and fought the trend!
There is massive opportunity in this market. Are you taking advantage? Literally have planned and alerted trades that pay over 300-1000%! You will need patience to wait for entries and the exits. But if you have self discipline or trust bracket orders, my process can help you get the results you want.
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
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 or failed breakdown reversal at key level
Join at VWAP mid day or end of day
Keep it simple. Don’t chase, wait for support levels for great risk/reward entries!
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.
Securing Profits on Options overnight
Sometimes you get this massive paper gains overnight on options but you can’t secure it right? Well if you have a big enough account and a margin account if you have calls you can. What you need to do is buy or sell the stock overnight. and the option turns into a hedge against that position essentially securing your profits.
Trade Ideas - Plan for Wed Aug 13
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
As expected after yesterday’s move SPY is gapping into more highs. What’s next?
There was significantly more volume at yesterday close than the open. almost 2 to 1 more volume. maybe 3 to 1. So in theory that implies that a brand new upside leg is in the making if we hold above yesterday’s close in coming days.