SPY continues consolidation ahead of FOMC while JPM dumps and crypto names rally. Trade ideas for Tuesday May 21, 2024
Good morning traders!
Got plenty of rest finally and it looks like just in time. Lots of opportunity developing.
I had been eyeing COIN to long and missed the entry yesterday and on the last 200 dip, but will be watching dips this week to join.
JPM dumped yesterday on CEO mentioning near time to retire and that the company would slow down stock repurchases while stock price is high.
NFLX also continued its reversal/breakout yesterday.
Unfortunately the one stock that I thought would have joined the rally has yet to — META so I will continue to monitor it.
Yesterday I had said I wasn’t sure what to trade, however this is where having trade setups and monitor price action comes in. SMCI gave a clear gap up reversal trade. I unfortunately didn’t take it but did alert it. Instead I waited for 870-880 area to come to restart a swing long on SMCI. The contracts gained 50%.
I also MSFT rally hard and waited for a pullback to start a swing long there and finally seeing the volume and breakout on NFLX I alerted long on 630c around 5.25 which contracts reaching $17 and may go to 20-30 by Friday.
Let’s review the price and the trade setups so if you missed these you can be prepared for next time and then I’ll go over trade ideas for today.
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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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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.
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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.
May 20 - NVDA 640c $5.25 —> ($200 —> $2800 potential)
May 17 - AMD 170c $0.20 Swing (entry day before) —> ($200 —> $1500 potential)
May 16 - SPX 5300p $0.20 Round 3 —> ($200 —> $2800 potential)
May 16 - SPX 5300p $0.50 Round 2 —> ($500 —> $2600 potential)
May 16 - SPX 5300p $1 Round 1 —> ($1000 —> $5000 potential)
May 15 - SMCI 850c $12 —> ($1200 —> $10000 potential)
May 14 - SPX 5240c $0.50 —> ($500 —> $10600 potential)
May 14 - SPX 5230/5225 bull puts $4 —> ($4000 premium potential)
May 14 - SPX 5245c $0.20 —> ($200 —> $6000 potential)
May 14 - SPX 5240c $0.50 —> ($500 —> $10600 potential)
May 14 - SPX 5230/5225 bull puts $4 —> ($4000 premium potential)
May 13 - SPX 5220/5215 bull puts $2.50 —> ($2500 premium potential)
May 13 - TSLA 170p $1.90 —> ($1900 —> $2890 potential)
May 10 - AMD 162.50p $0.25 (0.25 entry) —> ($250 —> $1600 potential)
May 9 - SPX 5210c $1.25 (1-1.50 entry) —> ($1250 —> $6200 potential)
May 9 - SPX 5220c $0.20 —> ($200 —> $1100 potential)
May 9 - SPX 5200c $3 —> ($3000 —> 15800 potential) (dipped to 2.20)
May 8 - SPX 5200/5205 bear calls $1.20 —> ($1200 premium potential)
May 8 - SPX 5190/5195 bear calls $1.50 —> ($1500 premium potential)
May 8 - SPX 5180c $4 —> ($400—> $1100 potential)
May 7 - SPX 5190c $1 —> ($1000—> $4000 potential)
May 7 - SPX 5190c $1 —> ($1000—> $4000 potential)
May 7 - DIS 105p $0.40 —> ($400—> $1600 potential)
May 6 - SPX 5170c $3 —> ($300—> $1100 potential)
May 6 - SPX 5175c $0.40 —> ($400 —>$7000 potential)
May 3 - SPX 5150/5155 bear calls $1.50 —> ($1500 premium potential)
May 2 - SPX 5020p $7 —> ($700 → $2180 potential)
May 2 - SPX 5070c $1.20 —> ($1500 → $7200 potential)
May 2 - SPX 5070c $3—> ($3000 → $7200 potential)
Apr 30 - SPX 5080p $3 —> ($3000 → $45000 potential)
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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Monday’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!
Please note all times are Eastern/New York regardless of what time zone I happen to be in.
SPY / SPX
Yesterday I wrote, I wanted 531.50 to become support or a dip and rip long entry at 529.50. So after the first 2 hours we basically got a rejection at 531.50 and then flush into 529.50 for a long. Or you could do nothing.
I made a short attempt but contract kept decaying and I got stopped out for -0.20, however bear calls for -3 went to 0.
Notice the failed pushed over 531.50, that is where one can make a plan to get short. Contracts essentially decayed and push and decayed and pushed until after lunch and we got the volume break after 1pm.
Tips:
Take a starter size
Target 1 to 2 levels below. use 1 level if you think its a consolidation day.
Use credit sells on consolidation days
NFLX
This was a no brainer. After 8 days of consolidation, the breakout and volume over 620 triggered and we could target 636 and minimum to come and possible new 52 week highs.
Today I’m watching for a dip on 635 for a long in case a day 2 rally comes. Be careful after such a large move in could go back into consolidation mode.
SMCI
Trade 1 Opportunity. Review the chart above for one of my text book short trade setups with a 86.3% win rate. I was tired and checked 900p but they were too expensive and so I didn’t to the extra work to identify a different contract. In stead decided to wait for 870 to come to get long.
Here is what the 850p contracts did. They went from 17 with 3 risk to 29. so a 12 gain for 3 risk.
The second trade setup was on once 870 was reached and to get long there. We got 1000c for 8.50-9.50 and reached $14 for about 30% gain so far.
Trade Ideas - Plan for Tuesday May 21
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.
COIN is gapping up big this morning and bitcoin is back over 70k.
BABA is gapping down, I’m hawking 86 is rough restart spot for possible swing long for 90+ in coming weeks. Might be better to just do 100 leaps and forget about it.
MSFT is gapping up, nice swing entries off vwap yesterady.
Ideas
Process is everything, the rest is identifying good opportunities. Overall the trend is up and BTFD continues to be on. I’ll be looking to join trend. However given the rally, I still have to keep the short option for profit taking/ de-risking ahead of FOMC as a possible market behaviour / play that develops.
Read on for the levels and actions I’m looking for.