TSLA and GOOGL earnings trigger overnight drop in SPY and QQQ. Trade ideas for Wednesday July 24, 2024
Systematic Profit Taking in an uncertain trading environment
Good morning traders!
Yesterday was a bit of challenge with SPY compressed and the question of one more leg up or not and how to position. What is really annoying is when the action comes after market close and you are away from the desk. I am definitely not surprised by the gap down overnight, but I wasn’t prepared to take action outside normal hours.
With that said we nailed a couple trades yesterday and I’m very thankful for my profit taking rules and Edge Trade Planner’s assistance for setting sell targets. When in an environment where there are bull/bear fights, having a process to take profits is essential, especially with near term options like we trade.
Let’s review yesterday’s Price Action and then get into ideas for today. I’ll be adding a few names we don’t usually trade to the watchlist: UPS 0.00%↑ GE 0.00%↑ SPOT 0.00%↑
Introduction (for New Readers)
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.
What Subscribers Get
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 Alert Leaderboard
Here's a look at some of the potential gains achieved through our entry alerts:
July 22 - CRWD 240p $1.7. reached $3.5! ($1700 —> $3500 potential)
July 22 - SPX 5580c $0.5. reached $3.3! ($500 —> $3300 potential)
July 19 - SPX 5500p $2. reached $12! ($2000 —> $12000 potential)
July 18 - SPX 5580p $5. reached $53+! ($5000 —> $53000 potential)
July 17 - SPX 5540c $2. reached $16! ($2000 —> $16000 potential)
July 16 - SPX 5660c $2. reached $10! ($2000 —> $10000 potential)
July 15 - SPX 5650c $1. reached $4! ($1000 —> $4000 potential)
July 11 - SPX 5600p $2. reached $23! ($2000 —> $23000 potential)
July 09 - Credit Sell SPX 5590/5595 bear calls 2.30-2.50 stops at 2.60 ( $2500 premium collected per 5k position risking $300)
July 08 - AVGO 1800c 13( $1300—> $2250 potential)
July 08 - SPX 5560p 2.50 stops 2.30 ( $2500—> $5000 potential)
July 08 - TSLA 270c 4.50 target 7.50 ( $4500—> $7600 potential)
July 03 - SPX 5520 2.5 ($2500—> $18000 potential)
July 02 - TSLA 225c 3.5 ($3500—> $8500 potential)
July 02 - SPX 5500c 2.50 ($2500 —> $10000 potential)
July 02 - SPX 5470 Bull Puts 2.50 ($2500 credit collected)
July 01 - closed TSLA Swing $2.65—> $12.00
**Past Performance is not indicative of future results
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Tuesday’s Recap
Let’s review Monday’s trades. Did you take advantage? If not read on an learn how.
SPY/SPX
Let’s review. Yesterday I was looking for 556.20+ to come. So where do I want to go long? I chose to wait for after the first hour and a potential double bottom at 554.20. We got that. SPX 5580c dipped under $4, I decided its worth risking 50% on or $2. We then got a rip over morning highs at $10+. What do we do? We systematically take profit. Risk of $2. 3R = 6. 6+4 = 10. Turns out it was near the highs on the contracts for the day.
I totally missed the read to go short off vwap even thought he back of my head was screaming it in afternoon. I just got stubborn on my thesis that we see 558 before next leg down.
CRWD
This was super interesting. 260 was retested at the open and delivered a clean failed breakdown signal. first long was cross of vwap and after 9:45 am and the second long was on vwap test at 10:45am.
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 July 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 overnight gap down and multiple support levels broken, if market can’t rally hard, we could see more downside. Here are the levels and ideas: