Failed breakdown on SPY provides 500% again! NVDA wants 700+. Plan for Tuesday Feb 6.
Failed breakdown on SPY provides 500% again! NVDA wants 700+. Plan for Tuesday Feb 6.
500% again! What's next for NVDA?
I was excited to get messages from subscribers telling me how they used the levels and processes to nail trade entries!
When I created Edumomo my goal as always been to build better traders. I just released the latest beta version of Edge to existing members and they like changes they see. I’ll be working on post about Edge on Thursday and how it supports the Two Hour Trading System.
Let’s get into planning for Tuesday… but first let’s recap Monday’s action.
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. (I will open up new memberships in mid Feb)
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.
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 → $22k 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
Monday’s Price Action (Education)
Overall everything played out as expected with a surprise bonus play.
TSLA
TSLA did something it wasn’t suppose to after it’s failed breakdown reversal off 183 on Friday. It got weak, gapped down and broke 183 out of the gate. As soon I saw that I was game for puts targeting 175.
The backtest/reject of 183 and the 20ma was the signal and I took 180 and 175 puts. Why? because we have a failed breakout from Friday and dipping under 183/182 puts all of Friday’s dip buyers in a wtf situation. So I could trust that if 180 broke stops would get triggered and shorts will come in and sure in that played out. The 175 target level was perfect!!
Unfortunately I accidentally took 180p for 2/16 instead of 2/9 so the gain was crappy. But here is how the 2/9 contracts moved.
A nice move on the 180p from 2.75 to 6.50+. and the 175p were just magic!
These went from $1 to $4!!! Thank you 300% gainer!
After this, a bunch of 177.50 and 180c came in and we got a bounce back into 183. And this point the cross 180 invalidated the thesis for 175 break to come today and opened the door for a failed breakdown trade to develop.
NVDA
First try, 25% size. got stopped.
Second try, after failed breakout out reversal. 150% size worked perfectly. I went bigger so I can sell some quickly to payout off the loss and and be patient for the flush out which we got when it high 675. At that point SMCI was holding and grinding higher and I had considered taking calls. but I just got paid a 100% here on top of the TSLA short. I didn’t need to overthink
So the first attempt reasoning was I saw a double top and lower highs. It was a good risk/reward trade but I’ve had NVDA fake me before and I wanted a couple of closes under vwap to add. we didn’t get that and I got stopped out for 0.50 loss on small size.
Here is what I want you to learn. Notice how 695 level is tested and rejected and then quickly we break below the previous highs. the we dip under pop and break under 686. That was my signal to go short bigly. take some profit on the basing and dip into 680 and then wait…. and then boom we got a fast flush into 673!
That’s good enough for me! leave a runner in case more dip comes or get stopped.
SPY/SPX
Given multiple levels so close by and that the selling started earlier then I wanted I hesitated to pull the trigger on puts and wasn’t going to chase it so decided to wait on failed breakdown reversal if it came around 490.50/491.
You can see the previous low at 4923 taken out but then quickly reclaimed. Seeing the 4926 reclaim had me wanting calls.
And we got a dip back into $3 to a great risk reward trade. These hit $16+.
The green lines are the take profit targets. Not bad :)
Summary Review of Market Price Action
Overall a nice dip/consolidation day after a 2 day squeeze/run last week. This was totally expected and somewhat predictable. The key was patience and not forcing a trade and having to be in something. Let the price action test levels and give clear signals. If you do that, you get paid.
Bottom line. If you look back, every dip in market has been bought since December. Bears keep trying to be first in on the reversal short and keep getting crushed.
Tuesday should be interesting however I won’t be trading. I have a boat trip planned with friends so taking the day off from trading. Last 3 days have been incredible with 45%, 38%, and 10% account gains if I remember correctly. I gave some back yesterday trying to reload short on TSLA ;). but that is OK. Was risking some profit for possible doubling or tripling of gains on day.
Educational Lessons
From the price action review you should have learned the following:
Take profits systematically
GO BIGGER when bulls get trapped
SPX 0DTE contracts and OTM on regular stock contracts can get you 300%+ gains!
Be patient on expected consolidation days and wait for range tests and failed moves to get in.
Use the levels I provide as a guide!
Trade Ideas - Plan for Tuesday Feb 6
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.
While I won’t be trading and normally I write/publish after seeing premarket action, but today I won’t be able to as I have an early start to get to the boat…
So based on after hours action, here are my ideas/thoughts…