SPY makes new all time highs but can it keep going? Trade ideas for Thu Jul 24
Good morning!
What a rally on SPY yesterday! Did you catch the reversal?
SPY/SPX
Morning setup - 2 level gap up reversal
If you have been reading my blog, you know I keep it relaitvely simple and I do the same thing over and over again.
Lately the action and trend has been triggered at the open so we take advantage of that while that continues. In the past it would come after the first hour.
I took SPX 6310 and 6320p
But there were challenges.
Can you spot the challenge? Because the moves came fast and stalled on the downside, both trades only yielded slightly over 100% gains.
That was ok, but I’m trying to be more happy about high probability gains and go bigger and take 100% gains.
I tend to prefer trades after 11am because I get more yield, but the important thing is to get 3R or better.
For our entries that was definitely the case. on 6320p. $5 risk 1 got to 10.. that is 5R. on 6310p. entry at 3 stops at 2 got to 6.. that is 3R.
LESSON: trade during first hour focus on multiples of R vs risk instead of like our afternoon yolos that focus on big gains.
Mission accomplished in the first hour.
After the early action It became a non trending consolidation period
I told members to watch for hod beak and if that comes, then look for dips to get long.
Afternoon setup - hod back test / trend join on 20ma
The afternoon provided another trade and the levels again were spot on!
SPX target 6352 to 6357.
So we take SPX 6345c with sell targets of 7 to 12.
Look what happened. it went right to those targets!
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 Thu Jul 24
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
Given the big rally I struggle to go long here. I need a 2 may 4 level pull back unless we see strong trend. my preference is to go short on exhaustion. As always price action and key levels are what we wait for.