SPY puts in bearish engulfing red day! What's next? Trade ideas for Wed Oct 16, 2024
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Good morning traders!
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We absolutely crushed it yesterday. I was frustrated with my short attempts on Monday, but yesterday it paid! That is why being systematic and being process driven is so important! There will be days, where you are like this should dump, but it doesn’t and then you get it a day or two later!
Know your trade setups, build your playbook and trust it.
Yesterday I wrote that if 583 broke, I like shorts. If you count 2 levels that brings you to 579.30. Guess where we hit by end of day! Use the levels as your guidepost for planning trades!
I’ve made some updates to the Playbook scanner. Check the scan for yesterday. Right now it focuses on finding 2 level reversals. In our market this last week these setups haven’t give much payout but they will. I’ll be working on adding more this week.
This is the full list of what was caught. If you were short any of the names, these also coincide with great exits levels for downside. The only questionable one off the bunch is the 10:08 signal, but guys anytime there is a 4-level move I have to start hawking for a reversal. Sure enough at 517 we bounce and pushed into 527 for 10 points!
Tuesday’s Price Action
SPY basically gave a mini push, but chips falling it broke 583, dumped 581, popped to trap bulls and then broke in afternoon to drop one more level in 579.
Overall ASML’s guidance may have popped the semi conductor rally triggering some fear in market. but the drop is barely anything yet and can easily get bought up.
NVDA back tested /filled the gap on up and then reversed dumping 4 levels to 130.50!
AMD broke last major support, I’ll update the levels for THT-PRO members. needs to reclaim 158 for upside.
GS gave up the entire earnings gap, dipping to the 217 level before bouncing 10 points and then drop back to 522.
IWM didn’t care about what other indexes were doing, it ripped all day… Guess where all the money coming out of SPY/QQQs was possibly shifting to.
Wednesday Premarket Action
SPY could be basing its been bounce up and down around yesterday’s close
IWM gapping up huge
SMCI back over 48 despite other chips getting slammed. Implies oversold overall.
NVDA and AMD gapping up a little - no surprise after the deep dump yesterday.
ASML could get another major red day. The guidance was awful.
Bitcoin is testing 68k again, if clears 70/72k, MSTR could rip 210-220+
Let’s review the trade signals in SPY and go over ideas for today.
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Welcome to my blog on Two Hour Trading—your daily source for market insights and trading opportunities. Here, you’ll find comprehensive market analysis, educational lessons, and trade ideas to help you excel in trading, all while spending less than two hours a day.
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Subscribers receive daily market analysis updates, educational content, and up to three trade ideas each morning based on real-life examples and my trading approach.
NOTE: screenshots from chat are from Edge Trade Planner. A platform available to THT PRO members. Join Us for live commentary and planning. Note my goal is to actively trade less than 2 hours a day finding 1 to 4 great trades a day.
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
2024 Q4 Alert Leaderboard
Here's a look at some of the potential gains achieved through our entry alerts:
Oct 14 - SPX 5870c $0.45 → $4.4 ($450 —> $4400 potential)
Oct 14 - MSTR 210p 4.50 →$13.7 ($4500 → 13700 potential)
Oct 14 - PDD 135p 1.50 (swing) →$?
Oct 11 - SPX 5810c $5 → $14 ($5000 —> $14000 potential)
Oct 11 - SPX 5805p $1 → $13.50 ($1000 —> $13500 potential)
Oct 10 - SPX 5800c $2 → $6 ($2000 —> $6000 potential)
Oct 10 - SPX 5750p $0.50 → $3.40 ($500 —> $3400 potential)
Oct 09 - SPX 5775c $2.5 (thanks JY!) → $22 ($2500 —> $22000 potential)
Oct 09 - SPX 5800c $0.5 (dipped 0.20) → $2.45 ($500 —> $2450 potential)
Oct 09 - SPX 5790c $1 (dipped 0.70) → $8.65 ($1000 —> $8650 potential)
Oct 09 - SPX 5790c Round 2 $3.5 → $7.5 ($3500 —> $7500 potential)
Oct 08 - SPX 5750c $1 (dipped 0.70) → $2.30 ($1000 —> $8400 potential)
Oct 08 - SPX 5750c $2 (dipped 1.70) → $8.40 ($2000 —> $8400 potential)
Oct 08 - MSFT 415c $3 risk 0.20 —> 4.10 ($3000 → $4100) 5R!
Oct 07 - SPX 5720c $1 (dipped 1.20) → $3.30 ($1200 —> $3300 potential)
Oct 07 - SPX 5690p $1.50 (dipped 1.55) → $10.50 ($1550 —> $10500 potential)
Oct 07 - PDD 145p $2.35 (swing) → 5
Oct 04 - SPX 5700p $5 → $15.50 ($5000 —> $15500 potential)
Oct 04 - SPX 5730c $6 → $23.90 ($6000 —> $23900 potential)
Oct 04 - SPX 5740c $1.50 → $14 ($1500 —> $14000 potential)
Oct 04 - SPX 5750c $1 → $5 ($1000 —> $5000 potential)
Oct 04 - OXY 55c $0.35 → $0.80 ($3500 —> $8000 potential)
Oct 04 - META 595c $0.12 → 1.90 ($1200 —> $19000 potential)
Oct 03 - SPX 5655p $1 → $5 ($1000 —> $5000 potential)
Oct 03 - SPX 5690c $2 → $14.20($2000 → $14200 potential)
Oct 03 - SPX 5695c $1-2 → $9.80 ($1500 → $9800 potential)
Oct 03 - NVDA 125c $0.55 (swing)
Oct 03 - XOM 123c $0.22 (swing)
Oct 03 - OXY 55c $0.33 (swing)
Oct 03 - PDD 155c $1.20 (swing)
Oct 03 - SPX 5720/25 bear calls $2 —> 0 (risk $500 to collect $2000 premium)
Oct 02 - SPX 5700p $2.50 → $8.50 ($2500 —> $8500 potential)
Oct 02 - SPX 5720/25 bear calls $2.50 —> 0 (risk $500 to collect $2500 premium)
Oct 01 - SPX 5720p $3 → $12 ($3000 —> $12000 potential)
**Past Performance is not indicative of future results
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Trade Recap for Tuesday Oct 15
GOLD BOLD ITALIC = price action signal
GOLD REGULAR = action to take/taken
GREEN REGULAR = trades I should have taken
SPY / SPX
Could this action be any more beautiful?
SPX 5830p was a beauty! I alerted this in THT-PRO entry at $1.80!!! ran to $10 and then $25! Who gets you 5 and 10 baggers!!!!?
Be sure to review and the key concept of planning, reading price action, and then positioning for the levels to come. There is nothing else to do between levels typically.
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/failed breakdown reversal
Join at vwap mid day or end of day
Keep it simple. Don’t chase, wait for support levels for great risk/reward entries!
Education - 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.
Let me know in the comments if you have questions or would like to see examples, I’ll share them.
Trade Ideas - Plan for Wed Oct 16
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
Expecting some chop today. Some names are gapping up but will they dump for a day 2 drop is the question or will market continue to be resilient and we start grinding higher again?
Overall I plan to sell 50-80% of yesterdays dip buys to take advantage of the gap up within first 15 minutes of the open today. Then will wait and see what happens.
Let’s go over the ideas…