SPY flushed into final 633 level yesterday. Is more selling ahead or will BTFD return? Trade Ideas for Thu Aug 21
Yesterday's idea for 639 rejection was spot on as well as the idea for 636.30 break. Were you able to trade it? If not learn how and checkout the new format for trade plans in today's blog.
Good morning!
What a day yesterday! SPY dumped much further than I originally planned but the level continue to be super precise!
Here is how to trade yesterday’s action!
SPY/SPX
Morning Setup: Breakdown Continuation.
I wrote this yesterday.
We got to 635.80 and it sliced through like it was nothing. Took too much off there. Turns out SPY was a falling knife! So we look for the next level which was 633.
I took profits per rules at 10:30 around 633.60. many times we can get a sharp bounce at 10:30 so is it worth risking profits for 0.60 more?
Then after seeing 633 double bottom and 10:30 level reclaimed it was time to get long. Ride that to vwap and maybe a bit more. Then I was watching if sharp V and full drop recovered. it wasn’t. Then the rest of the day into lunch was difficult.
After 2pm we got a failed breakdown reversal on 635.60 level and vwap reclaim which offered a long chance.
Overall outside of the morning short at 639 and the long at 633 it was difficult to plan trades. There was so much whipsaw. Today I will have to wait for extreme range and stay out of the middle range probably. It might be a no trade day.
NOTICE how all the easy money was done within 2 Hours
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
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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 Thurs Aug 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.
Current Market Context (SPY)
Key Levels and Their Significance
With the Jackson Hole Economic Symposium underway (August 21-23, 2025), and Federal Reserve Chair Jerome Powell's speech on "Economic Outlook and Framework Review" scheduled for tomorrow, August 22, at 10:00 a.m. ET, SPY is likely to exhibit heightened chop and consolidation today. Traders are positioning cautiously, leading to reduced volume and range-bound action. The last 5 days had range between 633-647, with volume exhaustion at lows suggesting dip-buying, but overall indecision amplifies false moves.
650.3 - Resistance (R3 Pivot) - Significance: Extended cap; unlikely reach without breakout catalyst. Failed breakout signals reversal, but low prob in pre-speech wait.
647.13 - Resistance (Multi-day High) - Significance: Weekly peak with sharp reversal; major overhead. In chop, expect failed breakouts trapping bulls.
643.59 - Resistance (R2 Pivot) - Significance: Mid-resistance with stalls; rejection point in consolidation—high for short fades.
640.82 - Resistance (R1 Pivot) - Significance: Near-term lid; Wednesday tests failed here. Key for failed breakout shorts amid indecision.
638.80 - Resistance (Premarket) - Price could not clear yesterday’s spike into close.
637.2 - Resistance/Support (Previous Day Close) - Significance: Central pivot; premarket hover (07:03 AM -05). Flips easily in chop—failed breakdowns below offer longs, rejections above signal shorts.
634.11 - Support (S1 Pivot) - Significance: Lower support near drop zones; bounce history. Critical for failed breakdowns in range-bound market.
632.95 - Support (Recent Low) - Significance: Wednesday's failed breakdown low; volume spike and reversal. Retests likely hold in consolidation, offering reversals.
630.17 - Support (S2 Pivot) - Significance: Deeper level; riskier but potential big reversal if failed break occurs pre-speech.
623.46 - Support (S3 Pivot) - Significance: Extreme downside; panic only—major bullish flip on failure.
6 SPY Trade Setups for August 21, 2025
Premarket near 637-638 suggests early range trading in 634-641, with bias toward dips being bought due to recent failed breakdown. High chop risk means tight stops (0.20-0.50 points) and volume confirmation essential.
** Focus on failures; targets modest (next level), risk-reward ≥1:2
Failed Breakdown Reversal Long at 634.11
Setup: Dip below 634.11 but quick reverse above (false break on low volume).
Entry: Buy above 634.11 on bullish candle.
Stop Loss: Below 633.50 (risk ~0.30-0.60).
Targets: 637.2 (previous close), then 640.82 (R1) for 3-6 points.
Rationale: Extends yesterday's failed breakdown; supports hold in chop, with pre-speech caution favoring rebounds.