Marketing gap up after volatile Thursday session! Is the bottom in? Trade ideas for Thursday July 25, 2024
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Good morning traders!
Wow. what a day yesterday! The idea looking for a gap down reversal was spot on!
We caught the long early yesterday as well as a 10x trade in the last hour!
Market looked incredibly precarious at the close yesterday, but that imho is exactly what they want, ad this morning shorts are getting squeezed in premarket.
Let’s see how market reacts to core PCE, but overall my bias is not BTFD as long as SPY 0.00%↑ 538 holds.
Let’s review yesterday’s Price Action and then get into ideas for today.
Introduction (for New Readers)
Welcome to my blog on Two Hour Trading—your daily source for market insights and trading opportunities. Here, you’ll find comprehensive market analysis, educational lessons, and trade ideas to help you excel in trading, all while spending less than two hours a day.
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Subscribers receive daily market analysis updates, educational content, and up to three trade ideas each morning based on real-life examples and my trading approach.
NOTE: screenshots from chat are from Edge Trade Planner. A platform available to THT PRO 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?
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
2024 Alert Leaderboard
Here's a look at some of the potential gains achieved through our entry alerts:
July 25 - SPX 5450c $1, $1.50, and $1.75. target $10. reached $10! ($1000 —> $10000 potential)
July 25 - SPX 5450c $5. reached $41.70! ($5000 —> $41700 potential)
July 22 - CRWD 240p $1.7. reached $3.5! ($1700 —> $3500 potential)
July 22 - SPX 5580c $0.5. reached $3.3! ($500 —> $3300 potential)
July 19 - SPX 5500p $2. reached $12! ($2000 —> $12000 potential)
July 18 - SPX 5580p $5. reached $53+! ($5000 —> $53000 potential)
July 17 - SPX 5540c $2. reached $16! ($2000 —> $16000 potential)
July 16 - SPX 5660c $2. reached $10! ($2000 —> $10000 potential)
July 15 - SPX 5650c $1. reached $4! ($1000 —> $4000 potential)
July 11 - SPX 5600p $2. reached $23! ($2000 —> $23000 potential)
July 09 - Credit Sell SPX 5590/5595 bear calls 2.30-2.50 stops at 2.60 ( $2500 premium collected per 5k position risking $300)
July 08 - AVGO 1800c 13( $1300—> $2250 potential)
July 08 - SPX 5560p 2.50 stops 2.30 ( $2500—> $5000 potential)
July 08 - TSLA 270c 4.50 target 7.50 ( $4500—> $7600 potential)
July 03 - SPX 5520 2.5 ($2500—> $18000 potential)
July 02 - TSLA 225c 3.5 ($3500—> $8500 potential)
July 02 - SPX 5500c 2.50 ($2500 —> $10000 potential)
July 02 - SPX 5470 Bull Puts 2.50 ($2500 credit collected)
July 01 - closed TSLA Swing $2.65—> $12.00
**Past Performance is not indicative of future results
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Thursday’s Recap
Let’s review Thursday’s trades. Did you take advantage? If not read on an learn how.
SPY/SPX
Yesterday’s idea was spot on! I wrote that I was looking for a gap down reversal off the 539-540 area and that is essentially what we got! leading to an $8 rip!
Let’s review. There were no shortage of opportunities yesterday.
We got the monster short squeeze of the 2 level reversal pattern trade setup. Yesterday I clearly stated I was looking for a reversal setup. And we got it!
The long setup was defined by:
Reversal Candle
2 level test / move from the open/previous day close
Cross over vwap.
TARGET: 1-2 levels above
The 548 target level was missed by 0.50. After a 10 point move that is more than close enough!
Additional Trades
I missed the short on the squeeze exhaustion, but was able to scalp a quick short off 544.50 rejection target 540.50 area (notice the peach line)
I used the peach line as a guide to plan a long targeting SPX 5460. so we take 5450c for $1 and size when volume came in $1.75. Then started selling at 4.50 and targeting $10 for the major exit.
Thoughts on Closing Action
The closing action was weird, but I’ve seen this before. Stops got triggered and market flushed back to morning lows, where bulls had their long orders ready to be filled again for a reload. This created a double bottom. It also trapped those shorting the close. Remember the place to short is at resistances or a failed breakout, not at support.
I wasn’t sure how this morning’s premarket would look like but I am not surprised by the gap up. Remember in yesterday’s blog I stated I wanted to start swing longs at SPY 50dma.
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/failed breakdown reversal
Join at vwap mid day or end of day
Keep it simple. Don’t chase, wait for support levels for great risk/reward entries!
Education - 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.
Let me know in the comments if you have questions or would like to see examples, I’ll share them.
Trade Ideas - Plan for Friday July 26
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
In theory Buyers should develop here at the 50ma, but lets see. Overall I’m looking for BTFD (Buy the ****ing Dip)
Here are the levels and ideas: