I'm back! SPY puts in first green day after a week of selling. Is BTFD back on? My plan for Tuesday Jan 9
Sorry for the hiatus from publishing. I needed some much needed family time and my sleep schedule was whacked. I’m back in PR and getting back into the routine.
My goal for the blog is to provide education and help you develop intuition and consistency in your trading through planning trades. Be sure to share the blog and provide feedback.
Let’s get right into it.
Price action review for Monday
SPY
Premarket gave a failed breakdown at 466.50 followed by a fast breakout on the open. Lately the bigger moves have developed after first hour and so I wanted to see what market wanted to do.
following process I made a plan to that 470.70 level thinking we would get at least 469.50/vwap back tested before an after lunch rally developed.
As you can see we got a clean rejection there, but the dip bounced off 470. At this point, I’m thinking we could see spy 472 for a 4 level move.
So I made a plan. SPX 4710p for $1.50 risk 50% and SPX 4730c for 3-4 and risk 50%. the reason.. we pushed over 470.70 into 471s and I was looking for a failed breakout to get short BUT if 470.70 turned out to be back test, then 472 was very likely to come.
We got to 472 with an 8-10 target and that was my plan and I closed up shop being still exhausted from my 18 hour travel day to get back.
Using the levels, one could have left runners per the original plan to sell 80% for8-10 and leave 20% to run on the day. the 4730c got to $30+ into the close.
EDUCATION
How did I target 8-10 on SPX 4730c for when SPY hits 472? Answer- using the levels I publish. The next level up on SPX was 4738. A little match and using the levels goes a long way.
following process, once 472 cleared, one could target 475 and we got within 0.50 of that. So if using the levels again I would have looked at SPX 4769 as a target and taken SPX 4750c for $1-2 after 2pm as a good risk/reward. with a target exit of $10-20.
As you can see the volume really came in quickly once SPY crossed 472.50 and using the SPX levels for targeting exits can make days like yesterday the kind traders live for.
So the price action imho, appears to be net bullish. I’m not completely ready to say BUY BUY BUY.
Given the selling last week, I think the next couple of weeks can bring some consolidation and reaction to earning will determine if we continue higher or not.
I do think there will be long and short opportunities.
Last week I wanted 475-476 retested before getting short for a larger pull back into SPY 460 before we continue up toward 500. Yesterday we almost got that 475 back test. In the larger context BTFD is game as long as we hold over 469.50 imho.
NVDA
NVDA finally broke out of a 6-month consolidation period. Watching all dips into 505-515 area to scoop long for 550.
Plan for Tuesday
SPY
Dips today to 470.50 and/or 472 and holds, then we should see 475+.
475/476 rejects, will take scalp short
Given the large move yesterday today, will likely be choppy/difficult so will need to size much smaller and look for any laggards.
I want to eye ADBE for a swing on March calls. It almost got to the 560 level to add last week and rallied back to 580 yesterday.
NVDA
I’m thinking of taking 535/540c vertical if I can get for under $1
AAPL
bounced off 200dma last week at 180, want to buy dips on 183, for 185 or 187.50 calls if I can get a 5-10x risk/reward on contracts this week.