SPY finally breaks 587 on Bill Auction. Did CRWV put in a blow off top? Where will they go next? Trade Ideas for Thu May 22
Will overnight market weakness lead to more selling or will get bought again and lead to new highs?
SPY / SPX
Yesterday I wrote I wanted to short off either 590.60 fail or 593 fail in the blog, but after review, I created this trade plan and shared with THT PRO members:
Idea: SPX 5900p $3 target $12-60
Trigger: reject 592 and break 591.60
Ok so. I was away from desk and it was super expensive! I had planned to be back by 1pm but got back about 1:25. I’ve outline above exactly how to read the action.
Notice the 591.60 plan.. that doesn’t mean you enter because it is at the price. it mean that that is a level and we want the price action to align with the idea. SPY popped to 592.30 (which would have it stop) but instead if you wait for the 592.30 failed break out and then enter at 591.60 as it broke or back tested and then used the 592.23 stop. it never would have hit.
That is how I would have executed it, if I was at my desk. So how costly was being late? Well 5900p went from $2 to $65 on reaching 582 target! so 3000% miss.
I’m super angry about this miss. but I tabled it.
Idea: SPX 5900p $3 target $12-60
Trigger: reject 592 and break 591.60
I went to process. This is where I told members be patient wait for 587 back test. I want SPX 5850p for $2-$4 target is 582 or $20 (but I was hoping for 25 on an overshoot)
Notice we got to the entry zone twice. and how I sold 50-80% the first time to make the idea risk-free. As long as SPY didn’t reclaim 587 the downside trend was intact. SPY came and to the 2-4 zone again filling my 2.50 and 2.80 orders. Why 2.80 (close to previous low) and at 2.50 I was thinking that it 10x if it gets to 25 wild target. Overall great risk reward with 5x+ goals.
CRWV monster rally
I’ll share my ideas on this in the Trade Ideas section for paying members
CRWV has been on a monster run. Blackbox Stocks showed a bunch of 125 and 135 call buy yesterday. Do I join them or do I look for a short? Find out in the ideas section.
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.
Trade Ideas - Plan for Thu May 22
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 broke 582 and flushed to 580 but has since reclaimed….
CRWV hit 119 and dumped to 106
MSFT dipped to 450 and back at 454
So will this dip get bought or will we get more selling is the question? I don’t focus on predicting, I focus on how price action interacts with my levels. How well does it align to one of my core setups and ideas? With this you don’t have to worry so much about what will happen. Just wait for the levels to come and the price action to align.