SPY continues range bound action - Trade ideas for Monday Oct 28, 2024
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Good morning traders!
As expected after Thursday’s consolidation, we got the follow through move on Friday. If fact it did my favorite setup. Gap Up Reversal
So remember the process/trade strategy I outlined last Sunday? when 575 comes, take 2 days out calls? Let’s see what that did for SPX. I actually missed the entry on Wednesday but we got the failed breakdown dip on 578 on Thursday to scoop.
With far OTM contracts you don’t need to get in exactly at the lows, but you do need to not use stops with smaller size and average down once if dips below 50% of original dip entry.
If you entered on Wed per idea, in Thursday premarket you were gifted with 4—>11 for exits, but then they dipped to 1.74 during regular session and 1.30 during after hours before spiking to 17 on Friday morning.
The super interesting thing is how you could enter the same contracts, for same idea on Friday for $4.
The reason I like SPXis I can trade that in after hours and premarket at interactive brokers.
Now take a look at SPX 5800 calls for same time period. You’ll notice you don’t get the same massive draw down, but the gains are also limited.
Regardless the strategy yielded 200% (if ITM) or 300-600% (if OTM) within 2 days!
Be sure to go back and read that strategy if you haven’t yet — It’s been the ultimate BTFD strategy for 2024!
Friday’s Price Action
SPY did it! It did a gap up and run right into the sell zone over 584. Like I said, I don’t trust that area. I was thinking Friday could be the breakout day like it has in the past but it didn’t. It gave 10 points from Wednesday lows, but I didn’t get the 12-14 points it has in the past. So we could be getting toppy or just in for more consolidation.
While I didn’t take the short in SPY/SPX like I normally would, I did take a swing on QQQ puts that paid nicely (300%)
Overall gap up reversal trades near highs has been a good paying strategy. I ignored my goto trade setup and missed out on a 8-10x trade! Partly because I made money on the TSLA, MSTR, and SPX swings and was content with the gains and was focused on algo development.
META - nice rally to 581 and then pulled back to 573
NFLX - gave nice 2 level reversal move after running to 567 and then dipped to 555
MSTR - ran to 245 and then yanked to 228 before recovering to 236
TSLA - roared to 269 and likely test 271-274 this week, if it clears 280-300 on deck.
Monday’s Premarket Action
SPY is gapping up and testing the 582s again. Many of the names that flushed on Friday are gapping up.
TSLA tested 271.50 in premarket
META gapping up to test 581 again. They report this week so contracts are juiced. I will wait for after e/r to trade
MSTR is gapping up 246! When will I learn to swing multiple weeks out at higher strikes as well? That’s ok. We murdered it and contracts are expensive and now aren’t giving the multiples I love.
Yesterday was the dip buys on support, today is the dividend.
Let’s review the trade signals in SPY and go over ideas for today.
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2024 Q4 Alert Leaderboard
Here's a look at some of the potential gains achieved through our entry alerts:
Oct 25 - QQQ 499p $0.80 → $4.50 ($800 → $4500 potential) — Thanks ACE!
Oct 25 - TSLA 265c $1.25 → $4.65 ($1250 → 4650 potential)
Oct 24 - SPX 5770p $2 → $6.2 ($2000 → $6200 potential)
Oct 24 - SPX 5810c $0.20 → $2.05 ($2000 → $20500 potential)
Oct 24 - SPX 5810/5805 Bull puts for $3.20 went to -> 0.12 (collect 90%+ premium)
Oct 23 - SPX 5790p $3 → $27.80 ($3000 → $27800 potential)
Oct 23 - SPX 5830c $6 → 11.20 5R ($6000 → $11000 potential)
Oct 23 - TSM 205c 0.55 → 1.55 ($550 → 1555 potential)
Oct 23 - MSTR 217.5c $3 → ? 20+ (swing). sold 50% at 6 for 100% gain!
Oct 23 -NFLX 750p $3.50 → 9.20 ($3500 → $9200 potential)
Oct 22 - SPX 5850c $3 (dipped to 1) ran to $14.80 on Round 1 ($3000 → $14800 potential)
Oct 22 - SPX 5850c $3 ran to $11 on Round 2 ($3000 → $11000 potential)
Oct 21 - SPX 5850c $1.50 ran to $5.6 on Round 1 ($1500 → $5600 potential)
Oct 21 - SPX 5850c $0.45 ran to $4.8 on Round 2 ($450 → $4800 potential)
Oct 21 - NFLX 775c $4 ran to $9.52 ($4000 → $9520 potential)
Oct 18- MSTR 210c $1 → $8.50 ($1000 —> $8500 potential)
Oct 17 - NFLX 705 commons buy after earning earnings. Exit 761. $56 Dollars!
Oct 17- SPX 5870c $1.80 → $7 ($1800 —> $7000 potential)
Oct 15- SPX 5800p $2.20 → $5.50 ($2200 —> $5500 potential)
Oct 15 - SMCI 50c $0.60→ $1.85 ($600 —> $1850 potential)
Oct 15 - SPX 5830c $4 → $18 ($4000 —> $18000 potential)
Oct 14 - SPX 5870c $0.45 → $4.4 ($450 —> $4400 potential)
Oct 14 - MSTR 210p 4.50 →$13.7 ($4500 → 13700 potential)
Oct 14 - PDD 135p(swing) 1.50 → $12 ($1500 → $12000 potential)
Oct 11 - SPX 5810c $5 → $14 ($5000 —> $14000 potential)
Oct 11 - SPX 5805p $1 → $13.50 ($1000 —> $13500 potential)
Oct 10 - SPX 5800c $2 → $6 ($2000 —> $6000 potential)
Oct 10 - SPX 5750p $0.50 → $3.40 ($500 —> $3400 potential)
Oct 09 - SPX 5775c $2.5 (thanks JY!) → $22 ($2500 —> $22000 potential)
Oct 09 - SPX 5800c $0.5 (dipped 0.20) → $2.45 ($500 —> $2450 potential)
Oct 09 - SPX 5790c $1 (dipped 0.70) → $8.65 ($1000 —> $8650 potential)
Oct 09 - SPX 5790c Round 2 $3.5 → $7.5 ($3500 —> $7500 potential)
Oct 08 - SPX 5750c $1 (dipped 0.70) → $2.30 ($1000 —> $8400 potential)
Oct 08 - SPX 5750c $2 (dipped 1.70) → $8.40 ($2000 —> $8400 potential)
Oct 08 - MSFT 415c $3 risk 0.20 —> 4.10 ($3000 → $4100) 5R!
Oct 07 - SPX 5720c $1 (dipped 1.20) → $3.30 ($1200 —> $3300 potential)
Oct 07 - SPX 5690p $1.50 (dipped 1.55) → $10.50 ($1550 —> $10500 potential)
Oct 07 - PDD 145p $2.35 (swing) → 5
Oct 04 - SPX 5700p $5 → $15.50 ($5000 —> $15500 potential)
Oct 04 - SPX 5730c $6 → $23.90 ($6000 —> $23900 potential)
Oct 04 - SPX 5740c $1.50 → $14 ($1500 —> $14000 potential)
Oct 04 - SPX 5750c $1 → $5 ($1000 —> $5000 potential)
Oct 04 - OXY 55c $0.35 → $0.80 ($3500 —> $8000 potential)
Oct 04 - META 595c $0.12 → 1.90 ($1200 —> $19000 potential)
Oct 03 - SPX 5655p $1 → $5 ($1000 —> $5000 potential)
Oct 03 - SPX 5690c $2 → $14.20($2000 → $14200 potential)
Oct 03 - SPX 5695c $1-2 → $9.80 ($1500 → $9800 potential)
Oct 03 - NVDA 125c $0.55 (swing)
Oct 03 - XOM 123c $0.22 (swing)
Oct 03 - OXY 55c $0.33 (swing)
Oct 03 - PDD 155c $1.20 (swing)
Oct 03 - SPX 5720/25 bear calls $2 —> 0 (risk $500 to collect $2000 premium)
Oct 02 - SPX 5700p $2.50 → $8.50 ($2500 —> $8500 potential)
Oct 02 - SPX 5720/25 bear calls $2.50 —> 0 (risk $500 to collect $2500 premium)
Oct 01 - SPX 5720p $3 → $12 ($3000 —> $12000 potential)
**Past Performance is not indicative of future results
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Trade Recap for Friday Oct 25
GOLD BOLD ITALIC = price action signal
GOLD REGULAR = action to take/taken
GREEN REGULAR = trades I should have taken
SPY / SPX
I really botched the short on Friday, but the long from Thursday was sweet!. I was watching for a bounce of 5845, that didn't materialize and then missed the obvious 5845 rejection short as I was doing something else. Really motivated me to work hard on join trend algo.
That said I’m super proud of the THT PRO members who when short around 1pm and just killed it! They learned the process and executed! (I am embarrassed to admit I ignored my number one paying strategy) But in a way I didn’t — I essentially took the same trade with QQQs as a hedge while I waited to see if that SPY bounce would come. But like I said, if I was active and focused, could have been an 8x+ trade!
There will be days like this, but I had 0 reason to keep pushing. Had a monster week with so many wins like TSLA and MSTR. My attention right now isn’t to make more money, but to make more time through automation and algo (though I have little time because I’m buried in it). but It’’s investment into the future.
Guys trading isn’t easy, and you need to put the time into making it process centric and reviewing trades every day!
If you are busy and want to see my commentary and ideas in real time consider joining THT-PRO.
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 Monday Oct 28
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
We have a big week of earnings and econ data ahead. expecting some early profit taking on gap up and then maybe some dip buying
Be sure to read this post in preparation for action this week ahead of elections.
Let’s go over the ideas…