META triggers market dump. Will the selling resume? Day Trading Ideas for Apr 25
TSLA had the opposite reaction to META despite opposite results. What gives?
Good morning traders!
Wild day yesterday and in after hours. I was looking for a gap up today into 408 to reload shorts but the reaction META’s earnings killed that.
That said there were no shortage of opportunities. I continued to focus on credit sells as I expected chop, and I was able to accurately predict the close on SPX which made the credit sell planning super easy.
Given the market reaction to various e/r names I’m looking for more downside to develop unless 404.50 on SPY is reclaimed.
In today’s blog, I’ll go over how I planned/executed some of my trades as education and then I’ll provide some trade ideas.
META vs TSLA - Market Reactions
So what gives with the market reaction. META beat but is down over 10% and TSLA missed and it is up 10%.
IMHO it has to do with the market getting ahead of itself. We’ve had a monster rally over the last 6 months and investors are taking profits in names that have had extended rallies and are willing to buy names that present hope that are down for the year.
Sentiment may have shifted from chasing growth to “value” investing. Time will tell.
However I do believe that 380-404 presents a spot in META to begin long term dollar cost averaging investing.
As for TSLA we will need to see more reaction over next 2 to 3 days to see if the bids are truly from “value” investors or if it is a short squeeze. A break of 158.50 will put me back in the bear camp.
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.
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Subscribers to this blog will receive daily updates on market analysis, educational content, and up to three trade ideas each morning, 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 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?
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.
Apr 23 - SPX 5060/5055 bull puts - Entry $1.75 ($1750 premium potential) drawdown < $200
Apr 22 - SPX 5050c swing - $5.50 → ($5500 → $42000 potential)
Apr 22 - SPX 5000c - $3.20 → ($3200 → $39000 potential)
Apr 22 - SPX 5020c - $0.20 alert, dipped to 0.55, fill at $0.70 → ($700 → $20000 potential)
Apr 19 - SMCI 750p - $1.50 → ($1500 → $38k+ potential)
Apr 19 - NVDA 800p - Entry $0.5 ($500→$40k potential)
Apr 18 - SPX 5050c - Entry $6 ($6000→$16000 potential)
Apr 18 - SPX 5020p - Entry $4 ($5000→$20000 potential)
Apr 16 - SPX 5140/5135 bull puts - Entry $2.50 ($2500 premium potential) drawdown < $300
Apr 12 - SPX 5100p $1. (dipped to 1.30) - Entry $2 ($2500 premium potential)
Apr 11 - SPX 5180/5185 bear calls - Entry $2.50 ($2500 premium potential)
Apr 10 - SPX 5180/5185 bear calls - Entry $2.50 ($2500 premium potential)
Apr 10 - SPX 5170c - Entry 0.50 ($500 → $5000 potential)
Apr 9 - SPX 5185/5180 bull puts - Entry $3 ($3000 premium potential)
Apr 9 - SPX 5205c - Entry $0.50 ($500→ $6000 potential)
Apr 8 - SPX 5225/5230 bear calls - Entry $1.20 ($1200 premium potential)
Apr 8 - SPX 5200/5195 bear puts - Entry $0.10 ($1000→ $8000 potential)
Apr 4 - SPX 5250p - Entry $4 ($4000→ $100k potential)
Apr 4 - SPX 5180p - Entry $1.30 ($1300 > $32k potential)
Apr 3 - SPX 5175/5170 bull put - Entry $1.50 ($1500 premium potential)
Apr 2 - SPX 5175/5170 bull put - Entry $1.50 ($1500 premium potential)
Apr 2 - SPX 5205/5200 bull put - Entry $1.50 ($1500 premium potential)
**Past Performance is not indicative of future results
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Wednesday’s Price Action (Education)
You don't try to make $100,000 ...You don’t start by saying, I’m going to make the biggest most profitable trade and turn $1000 into $100,000 and fix all my bad trades before.
You say, I’m going to plan and execute 1 trade as perfectly as I can today. You do that every single day, and soon you'll have a $100,000 and likely much more!
SPY/SPX
Given the recent rally, I was right to look for a short based on early action. I didn’t get 508 pop for a entry, but the price action made it clear. Review the chart for the actions we took yesterday and why.
You can see how premarket high was rejected and created a failed breakout move. It was then a bit choppy until the first hour completed but it kept making lower highs on pops. Then you can see where I added to the position once the direction was confirmed, using the average as a stop. Given the recent chop, I wouldn’t want to chase this down.
I did attempt a long once 504.50 reclaimed after 11, but got stopped. I then waited..
There was a failed breakdown reversal that developed and we were able to scoop 5070c. Here is the chart so you can see how you can get in after the turn/reversal and still have plenty of upside. I also loaded up on SPX 5060/5055 bull puts (credit sell trade) predicting a 1.75-2.25 fill when it was around 1.20.
The 5070c ran from $2→14.
Around 3pm, there was a back test of the 504.50 level. Earlier I alerted I expected a close of 5070-5075 on SPX. So during that back test, the 5070c came down to $0.90. I wanted 0.20, but there wasn’t enough decay and the chart indicated failed breakdown reversal so we chased in long at 1.20. I wanted a 5-8 exit and we got to 9!.
There is one major lesson I want you to take from the charts and how I trade. I’m looking to consistently extract profit. So you will see me sell 50-80 at 1 to 2 levels away and then lt runners do their thing. Make sure you do that, because if you wait for home runs, will that 1 home run pay for all the good trades you let go red on you and pay for the other trades that didn’t work out.
Consistent profit taking will let you account grow.
TSLA
Gave a wild short squeeze and then a beautiful short.
Check the process above. The reason to load up short is that the push into 168 was a short squeeze setup and the break of morning highs killed upside momo. Then on break of 162, and hard reject of vwap, we should target for 158.50 to break and flush into 156. That is why I was locking only 50% in at 158.50. But once a new low is made and it starts crossing back over the recent low, I lock more in.
Trade Ideas - Plan for Thursday Apr 25
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.
Given the big market gap down, it’s a bit harder to find a good risk/reward trade. I’ll be looking for a possible short covering scalp to the upside, and Ideally a push into resistance to join shorts for more selling.
My focus today: SPY, TSLA, META