SPY is gapping down after Trump/Putin weekend summit. Bear Trap or Bear mode? Trade Ideas for Mon Aug 18
Rare Trade Setup delivers high probability trade but /ES was better than 0DTE options, I'll explain why
Good morning!
Friday showed a rare setup that so far this year has had a 100% win rate and has only occurred 4 times in SPY in 2025. However this setup is common, technical, and can apply to any stock. I’ll talk about the this trade, its challenges with 0DTE options and using SPY on Friday.
As for the week ahead we have the FED meeting in Jackson Hole and Powell speech on Friday.
Without much by way of catalysts paying attention to volume, being patient for major levels will be super important.
SPY/SPX/ES
Morning Setup: Gap Up Failed!!
100% win rate: minimum of 1 level below 10:00am price (but only 4 samples in 2025)
Read through the chart above to see the steps to recognize this setup.
Now here is why I hate entering 0DTE trades before 10:30 or 11 am especially if chasing the direction. and OpEx didn’t help.
While it is a 100% win rate with only 1.5-2 point of range to target with an entry before 10:30am. I’d expect no more than 50-150% gain on ODTE.
Here is what SPX 6450 did.
As youo can see there was a lot of chop until targets reached and the payout was only 50-100%,. The thing is, if you have faith in the setup you can look to scoop on dips and hold trusting the payout will come.
Now a strong trend on a failed gap is established.
This led to me anticipating a flush will come in afternoon, however I was wrong on my target. (My target came in after hours).
Here is that trade setup.
Afternoon Setup: Failed Breakout Reversal/ Trend Join
I got stopped during the decay and and pop back over the 10:30 level.
Not all trades and setups will work. The important this is to manage risk and repeat process. I got in one pop early and stopped.
Unfortunately I cancelled my original 0.50 bid order for 6445p. If I kept it, then on the 3pm drop, those spiked to $3.80 delivering 500%.
Now here is the difference with using /ES instead of SPX ODTE.
5 point of risk and 15-20 points of may out 3-4 reward to risk. And you don’t have to worry about theta decay!
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.
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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 Mon Aug 18
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 rejected 644.80 just like it did Friday afternoon and this morning it broke Friday low in Premarket but has not broke Thursday lows. I’m using that as my rough guide.
When I look at the daily, I would love a did into SPY 639 to 641 area to get long, but that may or may not come.
Here are my levels for SPY and the price action I’m looking for..
I wouldn’t be surprised if today is a chop consolidation day so I plan to take it easy.
SPY — Ideally we get a weak open to test premarket lows, and maybe a failed breakdown reversal from there. Overall all 642.60 and 643 continues to be a buy zone.
if 641.50 breaks, I’d look for a pop back on 642.60 to take a starter short on reject and scale up on 641.50 breaking again targeting that 639.80.
IF 641.50 breaks and 643 is reclaimed, I’ll probably go long. either at 643 or over 643.30.
Levels: 633, 633.70, 637, 639.80, 641.50, 642.60, 643.30, 644.10, 644.80, 646.10, 648.50, 650.50, 652, 655.50
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Disclaimer: All content provided is for educational and entertainment purposes only. It should not be considered financial advise or a recommendation to buy or sell a security. The content is the author’s opinion only and may or may not be accurate. Author may or may not have positions in securities and may or may not open a position in next 48 hours.