SPY: Drama, Drama, Drama

So much Drama.

If you watched my SPY analysis video, you will know that unfortunately SPY went for my second case, least favorable and really dreaded scenario. Heading for the 392 first.
Its annoying. But then, because I was in no position, I said to myself, "Who cares? Why does this bother you so much?"
And then I was like "good point, Steve. Who really does care."

And that was the internal monologue I had with myself today.

But on that note, I am officially long. So let's get into it:

Recap:

So we had 1 of 2 scenarios planned out, either we would push up to attempt to make a break out of the trendline, which in hindsight was so unlikely absent any catalyst.
Or, the "dreaded move" (why I dreaded it so much in hindsight I have no idea) we went to test the 392 first and ended up in that "uh oh" range that I said I was going to like.

We did actually wick down a little bit lower than 392, all the way to 391, but it did maintain that range, which you can see on a zoomed in chart of SPY overlayed with the Math level cloud:


Def operating within the parameters I feel confident with.

99% targets:

So everything took out all of its 99% weekly targets promptly on Monday, including:
- XBI
- TSLA
- BA
- SPY
- DIA

(those are the only stocks I have 99% weekly targets for at this time).

So nothing really helpful in that regard. But they all made for amazing plays! I played XBI's and SPY's off open on Monday and was great.

Also, just some house keeping. I had to update my 99% targets on ES1! futures because it was old and withered. It was giving me some massive incorrect 99% targets and I was like "WTF?! this was my daily free-bee each evening at 6". But yeah, it turns out I just needed to update it. So its working again as of today. So I will probably start posting a bit more on ES now that I have more reliable levels.

Outlook:
So each and every day this week Python has been giving mad bearish sentiment readings, which have been proven to be true. But finally, EFFING FINALLY, its giving a bullish reading for tomorrow.
TPs for tomorrow:

Bull:
1. 396.6
2. 398.04
3. 399.48

Bear
1. 392.23
2. 390.51
3. 388.79

Not honestly in love with the individual odd for each target. Still slightly bearish looking and doesn't bode well for my long position.
But the worst that can happen is parabolic losses, so either way, whatever.

But really where are we going from here?

SPY's chart looks incredibly damming, I agree. Its not a great chart. We have trend support broken, we have pretty heavy selling and tankage. Etc. etc.
That said, SPY is not really doing anything we didn't consider. Remember from the video, the options were pushing up and range bound against that trend resistance until it decided to break up, OR sell down to the mid monthly low range and bounce from there to make another attempt.

(The other option not considered would be just tankage from here I just find that unlikely at this point).

So far, it seems like the later is where we are at.
We have some catalysts coming up, most notably jobless claims. I honestly don't know what to expect but you know, we know the probabilities for the week as a whole and the TPs so let's just keep those in the back of our minds.

What about the invalidation of monthly bullish thesis?

So technically, the move today kind of sort of hinders the odds of a bullish thesis. It lowers them by roughly 15%. That said, its not 100% decisive. And I am still leaning towards a bullish thesis temporarily. Why? Because in my 5 years of day trading (going on 6, HOLLA NEW YEARS!), after shorting Decembers twice in my career which lead to parabolic losses, I learned. And I learned fast. But also just because of the weekly and monthly odds.

Point of no return:

Again, this is covered in the video, but the point of no return from me is a drop below the 75 DSL indicator (you see it in the chart) on the daily. Those have been clear setups to new lows and I am fine being late to the party on this one, because at the end of the day I am a day trader. I make and lose money each day, regardless of the longer term outcome of the stock. So because of that I never feel obligated to take a swing position unless there is a very convincing setup. And I am not going to be convinced of a long term short until that setup happens. OR in January. I expect the selling to resume in January. At least, if we see rallying towards end of month this month.

But for right now, this seems like a compelling attempt at swing long with a fairly strict stop out.

And those are my thoughts!

Unrelated not important, skip this section it has nothing to do with the analysis:

On a side note, a word of wisdom to my day trader friends, not sure how you all day trade but don't forget the big picture!
On Monday I piloted a new invention, a real time hourly target model, essentially gives me hourly targets and probabilities, kind of like you see on the daily and weekly with Python. In 5 trades, 4 were successful, 1 was a stop out, but stop out with profit.
But because I was so focused on like, hour increments and just aimlessly following things without much thought, I actually completely missed that it was clearly a trend day and I literally could have just shorted it all day, instead of doing these time consuming hourly trades.

So don't forget to always take a step back and zoom out, no matter what type of trader you are!

And if you are interested, here were the trades for that day (yellow is stop out):


I stopped after 5 because I had also traded XBI and Natural Gas (BOIL/KOLD).

I am loving the 0 dtes every day too. The P&L for scalping those hourly targets was fantastic.

But I am also interested in hearing from other day traders. If you are a day trader, let me know:
a) Do you trade SPY each day? Or just reference it?
b) How have you been handling the volatility?

The majority of people who reach out to me are swing traders and, that's great, but I am really not a swing trader. I excel as a day trader and I try to be helpful to swing traders where I can. But its just not really what I am great at (swing trading). So interested in hearing from some of you fellow day traders.


Thanks everyone and take care!