SMCI wrecked. SPY reverses afternoon drop overnight. BOJ seeks to calm markets. Trade ideas for Wed Aug 07, 2024
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Good morning traders!
Do you have precise levels to trade from? Yesterday’s levels were uncannily accurate. Be sure to read the Trade Review to see how I interpret the price action at the levels and the actions I take.
The important thing I want to stress is, I don’t seek maximum gains on the trades I take. I want 1-4 trades a day where I collect profits from high probable wins. I want to plan trades and execute the plan and then be done. I use to try to catch every move, but that lead to overtrading and worse, revenge trading.
Alert Highlights:
SPX 5250c - $10 stops $8. Ran to $63. $53 potential profit on $2 of risk
SPX 5250p - $1.50. Ran to $13 into close
SPX 5300/5305 bear calls - Spiked to $4 before closing at 0. - $4000 premium collection with $1000 risk.
Overnight Action:
SMCI dumped on margin compression. 40% margin compression, while raising estimate 30%. The price action to me doesn’t make sense. Someone is unloading, so let them. If this flushes to 400-450, I think it becomes a no brainer buy for long term investors with over 1-2 year timeline horizon. I’ll be looking at taking 2026 leaps.
SPY volatility overnight. SPY dumped to 520 and held, and BOJ stated markets are too volatile and will not be raising rates. This could have been the trigger that reversed the drop and is now back at the key 528.60 level
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Let’s review Tuesday’s trades and then get into ideas for today. So much opportunity!
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:
Aug 05 - SPX 5300c $3.50 stops 2.50 ($3500 —> $11000 +potential)
Aug 02 - SPX 5350p $5.50 (overnight swing from Aug 01) ($5500 —> $45000 +potential)
Aug 01 - SPX 5480p $4.50 ($4500 —> $65000 potential)
July 31 - SPX 5520c $12 ($1200 —> $3390 potential)
July 30 - SPX 5430p $2.50 ($2500 —> $30000 potential)
July 30 - SPX 5400p $2 ($2000 —> $10000 potential)
July 30 - TSLA 220p $1.50 ($1500 —> $5000 potential)
July 30 - SPX 5450c $0.20 ($200 —> $5000 potential)
July 29 - SPX 5450p $4.50 ($4500 —> $16000 potential)
July 29 - SPX 5460p $0.20 ($200 —> $1100 potential)
July 29 - SPX 5470p $1.5 ($1500 —> $8000 potential)
July 29 - SPX 5480c credit sell - collect $2700 risk $500
July 29 - SPX 5400p $2 out $6 ($2000 —> $6000 potential)
July 26 - SPX 5400p $2 out $6 ($2000 —> $6000 potential)
July 26 - SPX 5450c $4 out $12 reached 15.50 ($4000 —> $15500 potential)
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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Tuesday Recap
Let’s review the trades and price action. Did you take advantage? If not read on an learn how.
SPY/SPX
As you can see from the chart above, we had an early dip right into the 517.80 level, and quick reclaim above vwap. I used this as my trigger to plan and go long. I count 2 levels up at that is 526.60. That is my goal. And precisely where it reversed!
We then got a perfect dip back on the 10:30 am level and near vwap, and another failed breakdown reversal with 523 reclaimed. Count 2 levels from there, and new target is 528.80. And we move precisely to that.
Then in the last hour, profit taking came in and reloading of shorts imho. Why? I always warn that after a 4 level move there is a possibility of a reversal. I love 4 level moves to look for failed breakouts or breakdowns, especially when vwap is at least 1-2 levels away!
Lots of opportunity yesterday. Upside gave 4x on 5250c while 5280c probably got 10x. and afternoon 5250p and 5280p yielded 10x+
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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 Wednesday Aug 07
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
The overnight rally has me a bit perplexed though not surprised. I will stick to process and today will wait until 10:30am before opening trades. Actually booked a private yoga class for 9:30am to force me to stay away.
I think we could see some more chop. Until SPY gets over 532.50, I’m in bear camp looking at 528.80-532 as possible swing short entry zone.