Will SPY reach 600 after yesterday's consolidation? Trade Ideas for Thu Jun 5
Learn how I recognize consolidation.
We are so close to 600 on SPY but not there yest. After days of rangy moves, yesterday was once of the tightest days of consolodiation. If you recall, it was one of the scenarios I expected. Why? I’ve seen the pattern many times, where we have tight consolidation on Wednesday leading to a dump at the close and then followed by a gap up on Thursday.
Let’s see if that comes true today.
After the first hour I was able to recognize that this was the pattern…. Let’s go oover the action and then in the ideas section I’ll cover what I see developing today.
SPY / SPX
IDEA: Consolidation all day with closing dump
I recognized that the day was likely to be chop after the first hour… But how?
On the chart above I marked how there were over 8 bars of flip flopping around vwap. Notice how in the first 30 minutes vwap sideways and higher. Then on the 596 dump there was high volume and vwap dropped but again went sideways.
Multiple crosses of vwap and sideways-ish trend of vwap makes me expect chop. After 3 big range and green days, the chance of a consolidation day also increases.
Based on that logic I alerted the chop and game plan.
I told members I wanted 200%+ only trades and given the chop I only expect 50-150% gainer trades and wasn’t interested in trading that.
I didn’t love the action and prices on SPX contracts and so waited for last hour.
I got back at 3pm to my desk and I saw the 2pm fail. But I wasn’t convinced we flush into close so I made a plan. on the 3 drop under vwap, I took nailed SPX 5990c for $0.60 and sold 50% at 1.20 to make it risk free. Meanwhile I also took SPX 5975p for 1.50. Selling 50% at 3 and 30% at 4.50. I was hoping for a flush all the way back on 595.20 but I didn’t get it. We closed at 4.19. and the 5990c went to 0. No big deal.
Notice how I consistenly sell 50% at double to make it risk free. No questions. no thinking about it. just immediately set the order after entry.
It essentally lets me position semi-risk free for a big move at the close. If we got a failed break down and squeeze, these go 5-10x. if we break down to 595.20 the 5975p would hit $12-15.
This my friends, is worth my time. Waiting an hour or two for intraday scalps on 0DTE is not worth the risk and time for 50-150% gains imho. I’ve done and I will do it again, but it makes me annoyed.
Overall not a big payout day.
META
Based on call volume on Tuedays and price action I chose to take swings in META 690 calls expecting 700 to come by Friday. i grabbed 690c at open for 2.50 and alerted I was adding around 3-4. Then intial action was annoying but it ripped to $6 to let me sell to make it mostly risk/free. Let’s see if I get $10+ by Friday.
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 Wed’s price action:
Market consolidated and dips were bought.
We are breaking out of 3 weeks of consolidation.
Entering after 11am continues to pay big.
Took overnight longs with expectation of gap up.
Risk of Red toppy candle and possible dump coming has increased
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.
I’m out of time, but I’ll make a video on this later.
Trade Ideas - Plan for Thu Jun 05
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
After yesterday’s consolidation, I’m looking for SPY to reach 599-601 by Friday, but if it doesn’t, we could get some selling triggered.
Here are the levels and price action I’m looking for today…