SPY Failed Breakdown Reversal Strikes Again! Will SPY rally today? Trade Ideas for Fri Aug 15
Wow! Perfect gap fill short and then go long from yesterday's blog! SPY followed it to the letter!
Good morning!
Yesterday I wrote… “If 643 can hold support we could get upside again”. We got exactly that! Why was that so important? Remember the failed breakdown reversal concept. Even though we gapped down in premarket, that 643 level was major support the day before.
By end of day we ran to highs and new highs overnight!
It today’s blog Im going to teach you how I read the price action to take that long.
SPY/SPX
Morning Setup: Failed breakout Reversal on 2 level gap up!
Here is what is important about reading price action and levels.
First recognize that 643 and 642.60 were major levels and they look bork and rejected in premarket. IT WOULD BE NORMAL to think downside is coming . How many people do you think loaded up short at the open?
This is why I wait 15-30 minutes at minimum for a trade and depending on conditions sometimes over an hour.
I actually got long a little earlier on the hod break and sold into 644.20 and then long again into the hod back test.
Here is what SPX 6470c did.
Solid work! notice because the long was so early in the day we short for 50-150% and the target is only 1.50 points away.
There is massive opportunity in this market. Are you taking advantage? Literally have planned and alerted trades that pay over 300-1000%! You will need patience to wait for entries and the exits. But if you have self discipline or trust bracket orders, my process can help you get the results you want.
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
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 or failed breakdown reversal at key level
Join at VWAP mid day or end of day
Keep it simple. Don’t chase, wait for support levels for great risk/reward entries!
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.
Securing Profits on Options overnight
Sometimes you get this massive paper gains overnight on options but you can’t secure it right? Well if you have a big enough account and a margin account if you have calls you can. What you need to do is buy or sell the stock overnight. and the option turns into a hedge against that position essentially securing your profits.
Trade Ideas - Plan for Fri Aug 15
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
Overnight SPY made a new high all time high. In theory we see more upside today. But remember the rule when SPY gaps up to new highs watch out for profit taking!