September 13
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Trades Taken: 4
SPY
Plan: Even with the volatility this week, the action and reactions at levels have been very sound. You need to be able to see the forest through the trees. I have very quickly racked up 20 for 20 trades on the month, so I will be picky today. At this point, I welcome a red trade to ensure I trade it well. It’s hard for new traders to learn and comprehend that everyone wins, but it’s how you perform in the red/losing trades that really shows if you are improving or not. Sure, the distance and time between red trades shows discipline and proper trade selection, but I am always looking to test how I do in a situation where I know I need to get out….
Today for SPY a slight gap up as of 9:00 am. Test of previous close for a long IF it has distance will be small size for me. I’m very curious to see where 5 and 9 ema on daily chart open up. I want to see if distance between end of day vwap and those moving averages is acceptable for risk. Interesting long there if we sell off this morning. For a short, I like the gap fill 563.68 into ATH (all time high) gap fill.
Result: I hesitated out of the gate on SPY calls. We made a last minute dip in premarket, making SPY open up right in entry. I did not take it, and it ripped without me. That’s ok, I have to accept that. I waited and watched. Saw consolidation and committed to taking it long with a fairly tight stop if we broke highs, using SPY 560 calls. A “breakout” trade that I rarely take, kind of beating myself up on it because it’s not a type of trade I like taking. Worked well, and peppered my sells fine, just not the type of trade I discipline myself to trading.
QQQ
Plan: For QQQ long, I really like a dip into the 20 and 50 ma on daily. This lines up well with intraday action yesterday and I think could give a reaction on a first test this morning. For a short, I like the distance into 476.
Result: Second trade of the day came on QQQ 476 puts shortly after the 10:00 news spike. I wanted to average back into high of that spike, risking into level. Managed it well for another base hit on the day. Capitalized on the first reaction up at that range. Big move down led to my 3rd trade.
Third trade came with speed in distance on QQQ 471 calls. Speed and distance from morning highs (which I shorted) down into previous close and morning open/lows in range. A great morning set up that can only be assessed once the day’s action forms. Nailed lows on QQQ here for a nice reaction. Put these last two trades together, and realize I nailed highs and lows of this move.
Fourth trade came on taking QQQ 476 second time. Speed and distance right back to highs with no break, taking the trade short again, risking into level. That’s a 10 percent candle (one minute)…..
Day after day I’m showing how to capitalize on the first reaction at valid levels. I’m not looking for reversals, but simply reactions.
September 12
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Trades Taken: 2
SPY
Plan: Big day yesterday, expected with CPI (inflation) numbers. Premarket highs on both markets are interesting because of daily levels. For SPY, I like a push into 557 area for a short, but if action stays volatile we can absolutely push to all time highs today. For a long, I like the first test of 5 and 9 ema on the daily. We did squeeze and remount them yesterday, but I do like a first test today. Keep in mind static vs dynamic levels. Moving averages are dynamic, they move over time as more data comes in, hence the word “moving”. A test of the previous close will likely be first test of support, I will take this with smaller size if we have enough distance at the open.
Result: We opened above previous close on SPY, by about 60 cents. I did take SPY 554 calls on that first minute as we approached previous close, paying out on the next minute into the 9 ema/first target for another solid first reaction trade.
The action then failed the previous close, and making it’s way down to moving averages on the daily chart. SPEED AND DISTANCE after failing the previous close, I started small on SPY 551 calls as we were about halfway between failure of previous close and moving averages. Great lesson of when you start averaging, the same rules apply to paying yourself into first targe. There was enough distance and fear in those few red candles after failing previous close that the action separated from the 9 ema on intraday. For me, this is a green light to start averaging. Again, worked well even though I fumbled my last sell a bit early!
QQQ
Plan: For QQQ I like a test of the 20 and 50 ma, this was tested in premarket and proved its worth. Has room to run north, so shorts will be quick today. For a long, I like the 5 and 9 ema on the daily chart. Previous close is something to pay attention to, but no distance with ten minutes to the open.
Result:
September 11
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Trades Taken: 2
SPY
Plan: CPI numbers released this morning. As of 9:00 am, a fairly typical reaction. A quick move down, just to recover. Typically we get large reactions, so curious to see how the rest of premarket shapes up. If we end up pushing above moving averages in premarket, this presents the opportunity of remounting the moving averages (for a long). This is what I have been stalking this week, just unfortunate it may come after numbers release.
551-552 on SPY is resistance until it isn’t. I will take the first test of this short IF there is enough distance. A long into previous close is circled for me, but again, distance is in question. I’m willing to take a loss on an early long this morning considering where we are opening.
Result: I focused on QQQ move as it triggered first. SPY long plan did work well into first target, which is my main focus.
I took a late afternoon trade as the market had some nice large moves today! I was not too surprised to see a reversal and large squeeze, it is CPI day after all. SPY squeezed hard right to the 9 ema and 551 resistance area. I stalked this trade and let it come to the palm of my hand by taking SPY 552 puts (tomorrow’s expiry due to time of day). Doesn’t look like a big trade but guys, do you not see a pattern of base hits and consistency of first reactions!? Stop looking for home runs and stack up your base hits. It will test your patience and discipline to not fall into greed.
QQQ
Plan: Would love to see a test of previous close for a long. For a short, way far away up at trend and 470 area. We can run up if remounting this morning and can squeeze. Same as SPY, I’m willing to take a loss on an early long attempt with the way we are setting up.
Result: My one and only trade this morning came right out of the gate on QQQ 459 calls. First minute was a hard wash right into previous close. As stated in my plan, I was willing to take an early loss on a long. Well, this trade produced perfection with over a point move right back into the 9 ema intraday. I talk all the time about this being my first target. Happens quick some days, buy man the premium movement on volatile days produces big moves in a short amount of time. Even on a red morning in the markets, both long triggers produced over 50 cents a move on the stock chart, a consistent first (visual) target.
Learn to control emotions at areas of support and resistance, and consistency is attainable!
September 10
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Trades Taken: 4
SPY
Plan: With a gap up this morning, I do like the previous close for a long on SPY. Has enough distance if we start moving down. I like the 550 area for a short, but will wait to see how we open as we may be right on moving averages. The 9 ema SHOULD provide protection in the 550 area.
Result: Second trade of the day came on SPY 547 calls as we approached yesterday’s highs. Nice averaging and happy with the execution and management overall. NOTICE how there is a yellow horizontal line on the charts. These represent yesterday’s highs, I took both SPY and QQQ long on this.
QQQ
Plan: For QQQ, I like the previous close for a long, and have two different shorts marked up. Have enough distance between them for a reset trade if the first doesn’t work.
Result: First trade on the day came on QQQ 458 puts out of the gate as we pushed into level and 5 ema on daily chart. I sold my last piece prematurely (trigger happy), but still happy with execution and reaction, nice way to start the morning. Instant turn around on premium, something I’m trying to get across to people.
Third trade came on QQQ 454 calls, a few minutes after I started on SPY, as we approached yesterday’s highs. A very nice snipe of entry here, getting almost perfect entry, and again nice payout on first reaction.
Fourth trade was on QQQ 456 calls. I’m pretty disappointed with myself on this one. A green trade, but trade selection was poor, I got greedy. Again, it’s not about money, it’s about consistency and trade selection, and this last trade was a failing grade even though it produced for me.
September 9
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Trades Taken: 3
SPY
Plan: A gap up this morning on the markets after a decent sell off on Friday. For SPY, a dip into previous close for a long certainly has the distance factor. I like a test of moving averages for the short, but it needs to be a straight push in the morning session.
After an emotional day for the markets on Friday, Monday’s are often a cautionary tale as well. Today’s levels are wide, because Friday’s action was wide. Having the market down for a week, I will be looking for a remount opportunity of the moving averages whenever that happens (IF/THEN) this week. Check out types of trades to learn more.
Result: First trade of the day came on SPY 548 puts. While it was after 10:00, this was sort of expected with wide ranged levels. I executed with small size as we approached level, working almost immediately I did not get a lot of size in, but paid out quickly into first target with instant reaction. This entry ended up being a perfect high of day short.
Third trade came much later, an afternoon trade for me on SPY 549 puts (tomorrow’s expiry due to time of day). I really worked this level, a nice reminder to myself that I really do prefer morning trades. While I’m very happy with how I managed the trade, I don’t like being in trades this long. Great movement, patience, and execution, I just don’t like the length of exposure. I like trades that get me in and out, and these are often presented in the first morning session.
QQQ
Plan: The short plan on QQQ is a bit cleaner into moving averages, having some daily candle resistance there as well. Long into previous close. The previous close is an interesting level if you zoom out, a range high on the charts dating back to March of this year.
Result: Second trade on the day, I nailed lows on QQQ 448 calls getting nice premium movement as we approached long level. Didn’t trigger the level, but with enough speed and distance on the move down, I was good with the risk. This ended up being morning reversal.