December 12, 2023 SPX, SPY, ES Trade Plan

Market Recap

In yesterday’s trade plan we provided a few key points such as:

My key pivot on the day comes down to 4585-4590. Should we get a gap down and this area trades I will be looking for a failed breakdown where if price trades back above 4590 I would go long.

1. If there is a failed break down of 4590 target 4605

2. Above 4605 target 4615

   1. Expect some resistance at 4610 before we continue

3. If VIX continues going down then a breakout of 4615 targets 4625

The market opened with a gap down where price opened at 4597, went as low as 4595 and then slowly started to trace up missing our first target by 2 pts at 4613. I missed our failed breakdown by 5 pts, but in this instance let’s recap how I would have traded the day.

The first 5 min candle I would have just sat and watch, but it closed above our pivot - this to me so far is a sign to think long. Waited for the next candle and when we retraced near the lows this is where I would have gone along and rode it out with a stop loss at 4590. With no news catalyst, VIX going down along with a cross of the 10ema below the 50ema on the 5min chart - this is all I needed for conviction. Additionally, looking at a recap in Volland that 4595 level became a larger negative vanna wanting to repel price from it.

Sometimes these trades present themselves fast especially at market open and going in with a plan with entry and targets, but more importantly with a mental stop loss and risk you can confidently enter and exit if your idea is wrong. No one gets them all right - whomever says differently is lying - but knowing how to manage your risk will allow you to take shots like this to make profit.

Later in the session I mentioned in our chat room that 4600/4605 would become supportive and that we could go further up targeting 4525-4530. We came up shy of 4525 by 3 pts.

Low volume day, but the open presented us with the best opportunity to go long and enter back in to capture the afternoon rally.

Tomorrow we have a major news catalyst in CPI. Days like this can be completely random so stay paytient and wait for the key levels to react to. Additionally, we have the 30-year bond auction. Similar to today’s 10-year bond auction this could have some impact to the market - while not large like CPI be careful.

Let’s jump into the trade plan and review our key levels.

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News Catalysts

1. 8:30am est - CPI

2. 1:01pm est - 30-y Bond Auction

For more information on news events, visit the Economic Calendar

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12/12 SPX/SPY/ES Intraday Overview (TL;DR)

My key pivot on the day comes down to 4635, but my LIS is 4625. Should we get bullish trend CPI then there is a good chance we rip right past thru 4635.

Is this area where I am most interested to determine if we continue up or sellback down…

Thus, if I am bullish you want to break above 4625, then 4635 where the real fun starts targeting…