July 21, 2023 SPX, SPY, ES Trade Plan
July 21, 2023 SPX, SPY, ES Trade Plan
Good evening/day/morning traders. If you were a bear then today was a good day for you. Congrats to those who were on the short side. Let’s recap and see what opportunities were there.
In our trade plan our bullish pivot was a break of 4570 - we opened the session and couldn’t get past 4564. This was our first signal to think short… From there the next candle on the 2hr chart and go smaller didn’t go above 4560 - this was your second attempt to add or enter a trade.
From there all you had to do was use Volland30 or VollandLive for changes to targets and it showed that price could go as low as 4530. Here is the Wiz of Volland alerting it in real time in the Volland Discord. This is why I am such a huge fan of the Volland platform and suggest you have a Volland30 subscription as a minimum as the data is truly a game changer to your trading strategy.
Before we get into the SPX trade plan let’s do an update on a few tickers. One thing I want to call out for those in Volland already, unlike SPX where it respects many Greek levels, individual tickers will typically overshoot a bit and then reverse course. Thus it is critical that you swing 2 weeks out on options and that you wait for key levels using 30 min or larger timeframes. Candles must close above/below your levels and trade accordingly. ADBE is a prime example of this from today’s action. Additionally, you must wait for these levels to take a trade - if price has broken the levels you cannot go chasing. I have seen many times we gap above or break through quickly only for price to retrace back down through a breakout level. MSFT is that example today.
ADBE
We mentioned that 525 was a key level. Price opened below this level before it made its way up to 528 where it immediately faced selling pressure. The loss of 525 as we said yesterday would trigger a selloff targeting 515. Our low? 514.09. Congrats if you played this. What’s next?
We are at a critical level and in an area of negative vanna. 515 if lost will sell to 512.5 and then 510. 510 is a major support level so I am very curious what happens here between 510-515. If 515 holds 517.5 is a speed bump on the way towards 540. Drop below 510 target 490.
Above 520 target 540
Below 507 target 500 then 490
ENPH
Congrats to ENPH bears. Our analysis on a bearish pennant played out where price gaped down. We opened at 178 went to a high of 180 where price was rejected and we quickly sold off to 175. Then throughout the day we tested 180 multiple times where price kept getting rejected targeting back down to 175.
What’s next? We have a bullish looking GEX paradigm on 0DTE Charm targeting 180-185. 175 is our key level and a break of it will quickly sell off to 170-167.5. We break below there target 162.5 where I think we will find some support. 175 holds we target 180. Above 180 target 190.
Above 175 target 180 then 190
Below 175 target 170 then 167.5
MSFT
Our bullish pivot was 350. We opened at 353 and hit a high of 357 before quickly selling off. Even if I was bullish on the overall day and sentiment was trending as such I wouldn’t have taken the bullish trade as we already passed the key level by 3 pts. Instead I would have waited for a retest of 350 and reviewed new data in Volland. If you also take a look at the 15 min chart, we attempted to test the highs again, formed an inside candle and broke below it. This was a signal and then taken our trade idea of below 352.5 target 347.5.
345-340 are major support levels. If 340 breaks we target 330. We stay above 345 we target 357.5 followed by 362.5. Below 345 target 342.5 - but lookout for a trap/reversal - then targeting 340. The better trade for bears is a break of 340 targeting 330.
Above 345 target 357.5
Below 340 target 330
Below 345 target 342.5 then 340 - higher risk trades
SPX/SPY/ES Overview (TL;DR)
Based on the 0DTE Charm it looks like an anti-gex paradigm, which is a bearish trend. Its target shows 4500 where price becomes balanced.
Ultimately 4540 break I would go long targeting 4565.
For the bears to continue the party they need to keep price below 4535 to target 4500.
Let’s jump into the trade plan.
For intraday updates please follow me on Twitter @DarkMatterTrade.
News Catalyst
No major news events. More earnings next week.
For more information on news events, visit the Economic Calendar
SPX/ES/SPY Trade Plan
Bullish bias:
Above 4540 target 4565
If there is a breakout of 4570 target 4585
Bearish bias:
Below 4525 target 4500
If there is a failed breakout of 4535 target 4500
If there is a breakdown of 4490 target 4470
As always keep an eye on Volland30, VOLD indicator, 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. 32pts more than the SPX levels shared. To get SPY levels simply take the SPX levels and divide by 10.03.
SPX - The Why Behind the Plan
Key Levels
Above Spot:
4535 - negative vanna
4565-4570 - negative vanna
4566-4583 - OB (2hr chart)
4575 midline
4565-4554 - 455.22-454.10 - $9.17B
4585-4595 - negative vanna
4589-4597 - OB (30min chart)
4593 midline
Below Spot:
4525 - negative vanna
4529-4520 - OB (30min chart)
4525 midline
4500 - negative vanna
4511-4500 - OB (1hr chart)
4506 midline
4522-4509 - 450.89-449.62 - $14.81B
4498-4493 - OB (15min chart)
4495 midline
4470 - negative vanna
4481-4466 - OB (1hr & 2hr chart)
4473 midline
4471 - 445.84 - $3.17B
4455-4450 - negative vanna
4453-4438 - 444.02-442.48 - $20.06B
Dark Pool Levels
Another +$2B of dark pool came in at the 4554 level as this becomes an important level where we know they are accumulating, but which direction will it push towards?
4565-4554 - 455.22-454.10 - $9.17B
4522-4509 - 450.89-449.62 - $14.81B
4471 - 445.84 - $3.17B
4453-4438 - 444.02-442.48 - $20.06B
4421-4393 - 440.85-438.06 - $25.11B
4384-4375 - 437.18-436.20 - $24.71B
4349-4344 - 433.65-433.19 - $12.14B
4325-4292 - 431.26-427.92 - $18.46B
We need to pay attention to these dark pool levels. Remember the levels where we see dark pool prints greater than $4B should peak our interest. I get my dark pool levels from Quant Data.
Orderblocks (OB) and Fair Value Gaps (FVG)
These are smart money concepts and some areas I am looking to see how price reacts. I will give higher credence to OB’s whereas FVG’s could be areas of basing/consolidation if they break.
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.
4566-4583 - OB (2hr chart)
4575 midline
4589-4597 - OB (30min chart)
4593 midline
4652-4665 - OB (1hr, 2hr chart)
4658 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.
4529-4520 - OB (30min chart)
4525 midline
4511-4500 - OB (1hr chart)
4506 midline
4498-4493 - OB (15min chart)
4495 midline
4481-4466 - OB (1hr & 2hr chart)
4473 midline
4408-4399 - OB (2hr chart)
4404 midline
4393-4380 - OB (1hr chart)
4386 midline
4375-4362 - OB (1hr chart)
4369 midline
4344-4328 - OB (1hr & 2hr chart)
4336 midline
4304-4297 - OB (1hr chart)
4301 midline
Weekly Option Expected Move
SPX’s weekly option expected move is ~55.03 points. SPY’s expected move is ~5.69. That puts us at 4560.44 to the upside and 4450.38 to the downside. For SPY these levels are 454.97 and 443.59.
Remember over 68% of the time price will resolve it self in this range by weeks end.
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:
4535 - negative vanna
4565-4570 - negative vanna
4585-4595 - negative vanna
4615 - negative vanna
Below Spot:
4525 - negative vanna
4500 - negative vanna
4470 - negative vanna
4455-4450 - negative vanna
Charm
Remember if IV is not expanding charm will start to overtake Vanna especially 0DTE as it comes closer to expiration.
For all expiry’s, Charm total notional value is bullish - negative is bullish and positive bearish - take the total of the far left and far right values.
The 0DTE view on SPX Charm shows a anti-gex paradigm - this is bearish. It will seek price at a balance point which currently shows as 4500.
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.