January 8, 2024 SPX, SPY, ES Trade Plan

Jan 08, 2024

Weekly Market Overview

Hello fellow traders - hope you had a great weekend. Before we kick into this weeks trade plan we have been giving a free preview of all of our trade plans for the past few weeks due to low holiday volume. This will be the last edition we offer free. While the weekly market overview and daily market recaps will be free going forward after today, our trade plans with exact level to target trade ideas and key levels will revert to only our paid subscribers.

We put a lot of effort into this daily trade plans and for only $15/month - less than $1 a day that is not to high of a price to support us.

THE BPSPX continues to show more and more weakness. This is a good leading indicator on trend that is to come still and based on my analysis of it I am very leery on going long on any kind of swings until we see this ticker stabilize. As mentioned in last weeks trade plan I think we are targeting back towards 61% on this chart which gets us to our 50 day moving average. You can see the 20 day moving average looks very similar to the SPX which we will discuss below.

Here is an interesting stat from our one of our favorite statisticians Wayne Whaley and graph thanks to Finfluential. What you will see here is the election year seasonality of constant up and up will not be the case and we should brace ourselves for something similar to 2020 where the market sold all of Q1 or will it act like 2021 where January sold off, but the rest of the year we rallied? . This first month of the trading session is extremely critical - basically January goes red - the rest of the year follows.

Additionally, Wayne has processed some stats on what happens after the SPX has an 8 week streak broken…There is still some positivity we can hang on to if this piece of data comes through.

This week from a news catalyst standpoint besides some FED Speakers and the 10-y bond auction on Wednesday, the big news day comes Thursday when December’s CPI is reported. Then later that evening China reports on CPI and PPI. On Friday the US economy then reports on PPI.

So be careful with trades this week. We could consolidate and chop around with tradable ranges, but swings might be tougher to come by until we get a bit more information out of the CPI and PPI.

With that said let’s jump into our trade plan for tomorrow…

1/8 SPX/SPY/ES Intraday Overview (TL;DR)

4685-4730 - Think of this zone like a ping pong match - we are contained within it and as long as we are play the edges of this zone. Long 4685 if it holds and short 4725 if it can’t breakout. Sure you could play in between those levels, but you are going to have a very small R/R on your trade…

Thus, if I am bull above 4700 will target 4710 and if we can get through 4710 then 4720. My only callout here is watch for a potential reversal at 4715 if any 0DTE options come in wanting to shift the market back down. Anything above 4730 tune into our chat room as I want to see how options flow progresses throughout the day.

If I am bearish I want to see price below 4725 - especially if we gap above 4710 to open the session. So I am looking for failed breakouts to go short until we get below 4700 to target 4685. If we get below 4680 then we target 4670-4665. If there is a catalyst for more selloff or VIX goes up then a breakdown of 4665 will target 4650 and below it 4640. Anything below 4640 tune into our chat room as I want to see how options flow progresses throughout the day.

Any updates to the plan or levels will be provided in our chat room.

For those who haven’t subscribed this is a great opportunity to subscribe.

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News Catalysts

12:00pm est - FOMC Member Bostic Speaks
3:00pm est - Consumer Credit m/m

For more information on news events, visit the Economic Calendar

My Trading Rules

Dark Matter

April 11, 2023

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1/8 - SPX/ES/SPY Trade Plan

Bullish bias:

Above 4700 target 4710
If VIX continues going down then a breakout of 4710 targets 4720
1. My only callout here is watch for a potential reversal at 4715 if any 0DTE options come in wanting to shift the market back down.
2. We could have an overshoot to 4725 or even 4730
If there is a failed breakdown of 4685 target 4700
1. Be careful with this one - especially if this is late in the day they could just continue to sell this off

Anything above 4730 I want to see how the options flow plays out after the session opens and we get through some of the trading day

Bearish bias:

If there is a failed breakout of 4710 or 4725 target 4700
Below 4700 target 4685
If VIX continues going up then a breakdown of 4680 targets 4670-4665
If we get a catalyst for further selloff then a breakdown of 4665 targets 4650 and below it 4640

Anything below 4640 I want to see how the options flow plays out after the session opens and we get through some of the trading day

Any updates to the plan or levels will be provided in our chat room. Keep an eye on Volland30 and the VIX for trend continuation or reversals.

Remember you can use this SPX trade plan to trade ES or SPY. ES value is approx. 37pts more than the SPX levels shared. To get SPY levels simply take the SPX levels and divide by 10.03.

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SPX - The Why Behind the Plan

Key Levels

4690-4680 - this zone acted as support during last weeks selloff. This will be my key pivot on the week. If it holds below we will target 4650.

4650 - there is little support here and I will want to see if price just zips right through this level or do we find more buyers here to consolidate. If you see this level and we zip right through it then it is a straight shot to 4610-4600.

4610-4600 - ultimately, I think this is the better zone where more buyers are going to come and bid up the market. If we get to this level and we can hold it then I want to see what kind of dark pool prints and such we may get here. If we see a large number of prints it could mean an interim bounce and prior to Jan OPEX we could head back towards 4780-4800 zone.

Above spot price is just a wall of sells that occurred last week. If I am going long I am taking 10pt profits and walking away happy with each trade I make. Not to say there is not a trade - we will find those liquidity zones - but be wary please especially until after the CPI and PPI prints this week.

Volume Profile & Trends

From a trend standpoint I am looking at what this falling wedge does. Do we breakout out of it and continue up or are we going to continue to selloff within it?

I want to get into moving averages as this has been discussed by many on X. Last week we lost support of the 20sma on the daily chart - closed below it twice on Thursday and Friday. Additionally, price also closed below and rejected the 5sma on the daily chart. The 5sma is a nice barometer for short term retracement when it finds itself too far - typically it rides this level. I am also sharing with you a view of these moving averages on the daily and weekly chart. I have kept the 10 and 50ema’s which I use intraday on smaller timeframes - 10 above 50 is bullish and vice versa is bearish.

So what does this mean? I want to see if price gets back above the 5SMA does it start to curve back up or will we continue to ride its wave down - thus sell any rips? Additionally if we are unable to capture that 20SMA then we could next target down to the 10ema or 50ema that is near 4615-4590 zone.

A view of the moving averages on the daily and weekly chart of SPX

Let’s review how our yearly profile is doing by looking at it on the monthly chart.

4724 - 2024 VAH - still forming
4710 - 2024 POC - still forming
4688 - 2024 VAL - still forming
4687 - 2021 POC
4433 - 2023 VAH
4128 - 2023 POC
3883 - 2023 VAL

From a quarterly volume profile on the weekly chart some key levels are seen.

4793 - 2023 Q4 VAH
4723 - 2024 Q1 VAH
4710 - 2024 Q1 POC
4687 - 2024 Q1 VAL
4555 - 2023 Q4 POC
4345 - 2023 Q4 VAL

If we take a look at the daily chart and review the monthly volume profile we find the following levels…

4818 - January ‘22 VAH
4793 - December ‘23 VAH
4724 - January ‘24 VAH - still forming
4710 - January ‘24 POC - still forming
4687 - January ‘24 VAL - still forming
4610 - December ‘23 VAL

Let’s now look at the 4hr chart and review what the weekly volume profile levels show.

4793 - 2023 Weekly & Yearly High
4783 - 12/26 Weekly VAH
4774 - 12/26 Weekly POC
4766 - 12/26 Weekly VAL
4754 - Previous Weekly High
4725 - 1/2 Weekly VAH
4705 - 1/2 Weekly POC
4689 - 1/2 Weekly VAL
4682 - Weekly Low
4647 - 12/11 Weekly VAL
4585 - 12/4 Weekly POC - hasn’t been breached

SPX 4hr Chart with Weekly Volume Profile Levels

On the smaller timeframe and intraday let’s go to our 30min chart where we will put our session volume profile on. Our levels of importance are…

4789 - 12/28 VAH
4775 - 12/29 VAH
4770 - 12/29 POC - hasn’t been breached
4761 - 12/29 VAL
4743 - 1/2 POC - hasn’t been breached
4732 - 1/2 VAL
4721 - Previous Session High of Day
4703 - 1/5 VAH
4686 - 1/5 VAL
4682 - Previous Session Low of Day
4651 - 12/13 VAL
4628 - 12/12 Daily VAL

SPX 30min Chart with Session Volume Profile Levels

Available for iOS and Android

Volland Data

For a better understanding of the various greeks below I would suggest you visit the Volland YouTube Page. Volland provides unique data showing where dealers are positioned providing in my opinion a higher degree of conviction to where price may move to.

Vanna - Levels where price may repel or act as magnet

Remember for price to go above spot through a magnet or repellent VIX and IV must decrease or stay flat. For price to go below spot through a magnet or repellent VIX and IV must increase.
Positive vanna - will act as magnet
Negative vanna - will act as repellent
When price goes through a positive or negative level it will flip it - ie negative becomes positive and vice versa.

Above Spot:

4700 - negative vanna
4710-4730 - negative vanna
1. If 4715 breaks and holds as support we could target 4725
4750-4755 - negative vanna
4765 - negative vanna
4780 - negative vanna
4820 - negative vanna

Below Spot:

4685-4680 - negative vanna
4670-4665 - negative vanna
4640 - negative vanna
4625-4620 - negative vanna
4605 - negative vanna
4595 - negative vanna
4580-4575 - negative vanna
4560 - negative vanna

Orderblocks (OB)

Resistance levels - at these levels I want to see if price rejects to short or consolidates for a push up. I couple this data with Volland, intraday option flows, and Dark Pool levels. Higher timeframe OB’s or FVG will be harder to break. OB’s are the stronger levels over FVG’s.

4696-4726 - OB (2hr chart)
1. 4711 midline
2. 4713-4726 - OB (1hr chart)
  1. 4720 midline
4724-4744 - OB (1hr chart)
1. 4734 midline
4740-4747 - OB (30min chart)
1. 4744 midline
4763-4776 - OB (2hr & 4hr chart)
1. 4770 midline
4778-4797 - OB (2hr chart)
1. 4788 midline
4782-4787 - OB (30min chart)
1. 4784 midline

4774-4807 - OB (4hr chart)
4790 midline

Support levels - at these levels I want to see if price rejects to long or consolidates for a push down. I couple this data with Volland, intraday option flows, and Dark Pool levels. Higher timeframe OB’s or FVG will be harder to break. OB’s are the stronger levels over FVG’s.

4652-4643 - OB (2hr chart)
1. 4648 midline
4618-4608 - OB (30min chart)
1. 4813 midline
4591-4580 - OB (30min chart)
1. 4586 midline
4568-4546 - OB (4hr chart)
1. 4557 midline
4559-4538 - OB (4hr chart)
1. 4549 midline

Orderblocks via Smart Money Concepts - blue are bearish supply blocks where as green are bullish demand blocks

Overlay of Key Levels

Above Spot:

4700 - negative vanna
1. 4703 - 1/5 VAH
2. 4705 - 1/2 Weekly POC
4710-4730 - negative vanna
1. If 4715 breaks and holds as support we could target 4725
2. 4710 - 2024 Q1 POC
3. 4721 - Previous Session High of Day
4. 4725 - 1/2 Weekly VAH
5. 4732 - 1/2 VAL
6. 4713-4726 - OB (1hr chart)
  1. 4720 midline
4735-4745 - Volume Profile & OB
1. 4724-4744 - OB (1hr chart)
  1. 4734 midline
2. 4740-4747 - OB (30min chart)
  1. 4744 midline
3. 4743 - 1/2 POC - hasn’t been breached
4750-4755 - negative vanna
1. 4754 - Previous Weekly High
4765 - negative vanna
1. 4763-4776 - OB (2hr & 4hr chart)
  1. 4770 midline
2. 4761 - 12/29 VAL

Below Spot:

4685-4680 - negative vanna
1. 4689 - 1/2 Weekly VAL
2. 4687 - 2021 POC
3. 4686 - 1/5 VAL
4. 4682 - Previous Session Low of Day
5. 4682 - Weekly Low
4670-4665 - negative vanna
4650 - Psychological level
1. 4652-4643 - OB (2hr chart)
  1. 4648 midline
2. 4651 - 12/13 VAL
3. 4647 - 12/11 Weekly VAL
4640 - negative vanna
4625-4620 - negative vanna
1. 4628 - 12/12 Daily VAL
4605 - negative vanna
1. 4618-4608 - OB (30min chart)
  1. 4813 midline
2. 4610 - December ‘23 VAL

Weekly Option Expected Move

SPX’s weekly option expected move is ~60.87 points. SPY’s expected move is ~6.12. That puts us at 4758.10 to the upside and 4636.36 to the downside. For SPY these levels are 477.04 and 461.80.

Remember over 68% of the time price will resolve it self in this range by weeks end.

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Dark Matter Trade

My Intraday Trading Rules

I do not trade within the first half hour UNLESS I am in a trade from the prior session and looking to close the trade or we have a major gap or a key level already broken I let the initial balance do its thing - I am just a small fish in a large ocean of traders so let's let them fight it out…

a year ago · Dark Matter

To cover our basis…

Welcome to my Substack where I provide a daily SPX trading plan to help guide my intraday trading. The purpose of this letter is not to advice you on your trading or investment decisions. I am simply documenting my daily trading plan for myself to help with planning and execution. These are simply my opinions and the data sourced from the likes of vol.land, TradingView, Quant Data and others. The stock market is risky, gains are not guaranteed. This is not about getting rich quick, but learn to educate yourself and make the necessary financial decisions on your own. This is not financial advice.