SPY at 261 is fresh demand zone. Prepare to long here, target is 285.
245 is the next fresh demand zone. Sell to open next month (Apr) SPY 245 PUT ; It should be more than $1000 per contract;
None stop, Willing to be assigned. Cost is less than 235 per share. Only need 12,000 cash.
#1 After this entry, if SPY will go down to 235, which is down more than 30% of 340; it is a good price to buy SPY for long term investment. Once got assigned, sell ATM call for next month instantly. When IV high, sell option will be good. After this step, Cost will be less than 225 per share. Even if SPY will go down to 170 (50% down from 340) in next few months, if I keep selling calls, the Cost will be almost near 170 per share.
#2 After this entry, if SPY goes up, Buy to close this PUT at 70% of the sold price within 3 trading days. (Planned as a turning point.) Or Buy to close this PUT if it goes up to 285 (Resistance). This is a "quick win" trading plan. Don't hope too much.
Trade active
⋅
SPY at 256, 5 below 261, so sell put 240, 5 below P245. STO Apr P240 Limit 12.57 at open 6:32 AM PST. If got assigned, the initial cost is 227.43;
Trade active
⋅
If you have used this plan, I will provide followup plan to rollover or to sell calls later. If you have not used this plan already, please don't use it. The price situation is different from what I have anticipated.
Trade active
⋅
If there is a chance to make a profit, I prepare to close this trade today. I would not hold it over this weekend.
Trade closed manually
⋅
BuyToClosed at Open with market, filled price 11.89 at 6:34 AM PST. Actually, yesterday I missed the 265. Once I got profit, I should move stop to make even + Fees.
Ok, we touched the lower demand zone without any bounce. What are your thoughts on the current picture?
PlanTradePlanMM
⋅
@ghotforex, Current ES is under 2400, which means the 243-245 level had been broken.
235 level is not fresh, (12/24/2018 used this level once)
The Next high quality fresh demand level is 220. we are still in a down trend. My plan was just to catch a bounce, but I missed the 265 this morning.
Tomorrow is Friday, it may open low and close high. If it will be down whole day, the last hour may go up. Most traders will close the short positions with profit.
ghotforex
⋅
@PlanTradePlanMM, after-hours SPY $244.85
How do you know if it's broken?
Does short closure with profit intensify move down?
PlanTradePlanMM
⋅
@ghotforex, Please add "ES1!" to your tradingview list. ES is e-mini futures of SPY.
It is traded from 6 p.m. EST on Sunday to 5 p.m. Friday. There is a trading halt between 4:15 p.m. and 4:30 p.m. each day.
Right now, ES is 2402. ES 2400 point is same as SPY $240.
When the futures contract rollover, ES and SPY will have few points difference. There is a strategy to buy the lower one, sell the higher one with same amount, to gain the difference as interest.
AlphaFourninetwo
⋅
How do you figure these are demand zones? I don't see any historic volume at those points.
PlanTradePlanMM
⋅
@AlphaFourninetwo, I will try to use price action only, as clear as possible.
There are lot of classes teaching demand/supply.
My check list:
1. Big and quick move from that zone (open gap is the best),
2. less than 6 bars in that zone (1 doji bar is the best),
3. it is still fresh, not been touched yet.
4. if it is in the middle of a strong trend, that is a plus.
5. today, Big Gap into this zone is the best. Normally, it is an exhausted gap.
6. for single stock, check SPY at the same demand/supply direction.
7. for single stock, verify earning date. Earning Gap might break any demand/supply.
Volume in today's world is not a real value. The High-frequency trading is done by computers.
For example, ABC is a $30 stock. One High-frequency trading computer bought 3000 shares at $30.03 and sold at $30.04 within 0.001 second.
Compare with stock Volume, Option open interest will be more accurate. If certain option open interest was increased quickly, it might be a signal.
dware1983
⋅
Not sure I understand your math, if I sell the 245 put for $1000 and get assigned, I still have to pay 245x100= 24500....even gaining that 1000 I'm still going to be paying 23500...Please explain?
PlanTradePlanMM
⋅
@dware1983, if I got assigned, which means 30% down from 340 in 2 months, a huge discount price for long term investment.The initial paying is under 23500 (235/share), Once I got assigned, I will sell call every month to keep the cost going down. For IRA account, I need 23500 cash. for trading account, only need 12000 cash.