Will end of US/China trade talks today trigger sell the news? Trade Ideas for Tuesday Jun 9
How I recognize consolidation days.
Yesterday’s payouts came via TSLA (200%) and SPX puts in last 5 minutes.
Let’s get into the action and then ideas for today. Overall SPY continues its slow grind higher and breakout but there are signs of exhaustion…
SPY / SPX
IDEA: Consolidation and basing on 599.50 target 601.50
I either wanted 598.20 dip to get long or 599.50 to become support. The problem… We had choppy consolidation all morning and the contracts where juiced.
Finally after 11:30 599.50 showed signs of support.
The PLAN: Go long for 601.50 Push: With a target of 6025 on SPX. I wasn’t comfortable paying over $2 during the consolidation. I believe I alerted I wanted for $1-2. There was a dip down to 2.60 yesterday and then a run to $9. A 200% potential gainer from $3
Given contract decay an unknown for when a move would happen I did not like risk/reward one bit to pay more than $2. The move triggered between 12pm and 1pm which is my lunch time and I don’t want to be opening trades.
Guess what…. NO TRADE. IT’s 100% OK!!!! all conditions for the trade I wanted were not met. yes it could have be 6R considering $3 long $2 stop…. but it didn’t align in timing, price action, and contract pricing.
We then waited for 601.50 to be tested. It didn’t come… and I was a little late recognizing the short.
We basically consolidated just under 601.50 and 601 for 2 hours!!! I got bored and I just waited for the 601.50 tap to come. It didn’t so how does one know it’s time to get short. Credit sells are the way to go in this action…
Notice The RSI Divergence. That is the fist signal.. But if you took puts the decay would have killed you…. 6010p. went from 2 to 4 to 1.
The actual drop was trigger AFTER the high volume bar into the 601.20 push just before 3pm.
Since I missed the short I planned for a long bounce off vwap/10:30 level. taking 6015c and locking 50% for 100% gain making it risk free in case we got a squeezer. but then I noticed the action… and thought we may close between 6005 and 6010.
I alerted I wanted 6010p for 0.20-0.30 at 15:53 thinking target 2-5. It dipped to 0.35 and I scooped for 0.40 at 15:55.
and then BOOM!!!! follow process. sold 50% at 1.20 and 50% at $5. 1.20 protect capital. $5 is over 10x gain :). No need to be greedy. I got what I wanted in under 5 minutes! Spectre Special delivered!
TSLA
On Friday I started a swing on TSLA 310c anticipating that this week it will recover to 330+
Yesterday we got the perfect dip to 281 to add at $3
Above is the rough breakdown. In hind sight, this was a clean all day grinder and clearance of 301 brought nice acceleration.
Not massive gains, but solid work and the trade is now risk free. The real payout comes on if we get to 337 this week.
There is massive opportunity in this market. Are you taking advantage? Literally have planned and alerted trades that pay over 500%! 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.
Thoughts from Monday’ price action:
Market continues to sell when near highs
Large Dips continue to get bought
Be Patient for entries especially on SPY/SPX given the low volume grind up.
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 Tue Jun 10
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
Overall it’s really hard for me to get long here at the highs on SPY. Given yesterday's action and volume selling into highs over 601 and then the push into 602 with sudden volume selling back under 600 and test of 598.20, I’m got a slight bearish bias. On the bull side… 598.20 was bought….
A number of names are on the verge of breakout and holding strong so I’ll cover a couple of those.
Here are the levels and price action I’m looking for today…