Is the SPY rally over? How to plan a 50x trade and my plan for Thursday Dec 21.

SPY Price Action Review

Morning Session

I needed a dip to get long/confirm support before I could get long, and per plan decided to wait for the first hour.

SPY gapped down and immediately they ran it up past the r/g line where I was originally considering a short.

I ended up taking small 4780c and 4760p around 10:45 to let market shake it want it wants to do. Frustratingly enough, got stopped out of both as market went sideways for next hour. That is fine. I figured a trade after lunch will develop.

Afternoon Session

After 1pm I noticed the failed breakout and decided I like selling credit.

I then got a call from one of my coaching students as I was watching for vwap break. Little did I know that he had made a 50k bet that the 1pm pop punked him out of missing out on over 500k in gains until last night where we spent time talking about what to do differently.

Anyways, we started discussing what to do around 2pm and jumped in on vwap break and particularly the back test around 2:15pm with SPX 4650 and 4665 being contracts of interest.

Per premarket prep, the plan was for SPY 473.50 to break and if it does, could see flush into 469. And that is exactly what happened.

How to use Edge to plan a 50x trade

Members, you can use edge anytime during the fail to plan the trade. just enter the target levels. You use it on SPY, SPX, or other names. When choosing to do SPX it will also suggest premium sell trades if it makes sense.

NOTE these are not recommendations to buy or sell, simply making the math and analysis easier based on your inputs for you to make the judgement call on if the trade makes sense for you or not.

What an amazing afternoon!

Trade Plan for Thursday Dec 21

So. I’m not convinced that the bull rally is over. But the first warning shot has been fired. I’ve see days like yesterday be completely reversed the following day. I’ve also seen the following day be range bound and then the day after see continued selling.

So my overall thought process is to keep doing more of the same. make bull and bear plans to take action at key levels.

SPY the dip into 468/469 was perfect/oversold for a long. Likely see 471 retested. They key for bulls will be a reclaim of 472.90.

I’ll be watching for reactions to 471 and 472.80ish for possible short or long. break of yesterday lows I think can take us to 462-463 area for a long.

I considering a short if 471 rejects at open looking for gap fill and targeting 466.

Dips on 468/469 that hold and quickly reclaim vwap, I’ll consider a. long looking 473.

I’ll also be focused on FDX and MU. FDX break of 245 can trigger 235-240 to come. otherwise if it dips and holds, may consider 250c.

NVDA that 482 level I had been talking about for a long dip came yesterday, and today gapping up into 487. likely take profits. Overall I would like to see 477-480 for swing long entry into Jan.

MU will look to join trend, not convinced this rallies/runs all day so price action will be key.

TRAVEL PLANS

I’ll likely be traveling to see family (12 hour trip) tomorrow so may not be able to trade Friday.