SPY clears 660. What's Next? Trade Ideas for Tue Sep 16
Warning FOMC tomorrow. Market may derisk/see profit taking.
Whoops sorry I jumped the gun and sent out the newsletter without talking about yesterday’s action.
SPX on Monday
Overall it was a gap up that held with all day consolidation. Late in the day it put in a failed breakdown reversal with large buying on the dip.
We nailed longs and shorts but it was frustrating as we only got handful of trades that paid 100-200% and I was aiming for a 500-1000% payer.
But seriously we consistently get these 100-200% payers (lol) and I need to be happy about that. Any suggestions?
The main less from yesterday, is that when you have consolidation action, the failed breakdown or failed breakout should lead to the opposite side of the range being tested.
As you can see that is what we got last day! I was slow to recognize/plan for the squeeze given the chop unfortunately. If I did a better job planning there was a 500-1000% payer into the close. The closing trade I did plan went from 1.50 to 4+ in under 5 minutes :)
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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
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Plan for Tue Sep 16
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.
Market Context
SPY is trading in a consolidation pattern over the last 5 days, with recent highs near 660.91 and lows around 647.22. The latest premarket close is 661.64, positioned above the pivot at 660.13 but below R1 at 662.79, suggesting a mildly bullish bias heading into the open.
Key Events Today
8:30 AM - Retail Sales - Measures monthly change in US retail sales, forecasted at 0.2% growth.
fOMC tomorrow
Key Levels and Their Significance
668.23 - Potential extension resistance: Acts as R3
664.18 - Overhead resistance: R2 level with recent rejection patterns
662.79 - High Priority: R1 with premarket proximity, role in failed breakouts, volume spike >2x average on prior tests, 70% probability based on bounces, for day traders at open.
662.45 - Premarket high resistance: Frequent reversal point in early action, 60% probability from clear rejection on 1-minute chart
661.12 - Premarket low support: Minor bounce level, 50% probability with moderate volume, suited for intraday traders.
660.13 - High Priority: Pivot point for breakdowns, recent holds with 2x volume spikes, 75% probability
658.74 - High Priority: S1 support for failed breakdowns, Fibonacci alignment from multi-day lows, 65% probability, for swing traders midday.
656.08 - Lower support: S2 with infrequent bounces, 45% probability based on prior reversals, relevant later in session.
