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We had great risk management on our SPX Put credit spread that was opened this week in the Compounding Growth Mastery. We also exited our Walmart (WMT) trade to protect capital on our call credit spread.

As for open trades in the Mastery, our LNG call debit spread looks about the same. We’ll discuss the risk management of our AAPL call credit spread ahead of it reporting earnings next week.

We also opened an iron condor on the SPX on Friday, betting that the SPX will open on Monday morning below $3,800 and above $3,595. We’ll dive into this trade deeper on the Analyze tab to review the risk management of the trade. We also have a similar plan on the SPY for those that have smaller accounts, which we’ll break down in the video above.

While we’re waiting for those larger swing opportunities (to hopefully short the rallies), we want to try and collect easy premium coming in. There’s a balance we want to consider between max loss versus max profit when trying to average 10% return per month.

We’ll review one of my trade ideas on NFLX as there are Big 3 buy signals on the lower time frames, it’s trading above the daily 21 EMA, and premium is getting pumped into the calls.

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Overall, the bigger picture structure has remained relatively the same. We’re continuing to build off of our game plan to short the rallies. In a perfect world, we want to short the market as close to the daily 50 simple moving average (SMA) as possible.

In the video above, we’ll review the recipe for a potential move back toward the daily 50 SMA:

• SPX & QQQ: Two closes above the daily 21 EMA
• VIX: Two closes under the daily 21 EMA
• $DXY: Two closes under the daily 21 EMA
• HYG: Two closes above the daily 21 EMA
• Big 3 Buy and Sell Signals:
  • Cancellation of all lower timeframe Big 3 Sell signals (SPX + QQQ + IWM + HYG)
  • Lower timeframe Big 3 Buy signals (SPX + QQQ + HYG)

Overall the structure of the market hasn’t changed, as the SPX and QQQ have not had two official closes above the 21 EMA. This means that overall, the path of least resistance is in favor of the bears.

We can use our Big 3 buy and sell signals to determine when the structure on the lower time frames are changing from bearish to bullish.

We’ll also review charts of big names that reported this week like NFLX, TSLA, and SNAP. We’re patiently waiting for major companies to report earnings next week including AAPL, AMZN, and GOOGL.

In Sunday’s send, we’ll review our open and closed positions in the Compounding Growth Mastery and walk through potential setups for the week.

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Our last report in focus this week is Snapchat (SNAP) reporting on Thursday after the close. As we head into Friday, take into account that it’s Options Expiration (OPEX). OPEX can cause extreme volatility. Expect options premium to get crushed, so choose strikes wisely.

At the start of this week, the S&P 500 (/ES) ran toward the daily 21 exponential moving average (EMA) at $3,724 and held upward structure. On Wednesday, /ES broke structure at $3,751 and fell to $3,693, the Point Of Control (POC).

After breaking structure, /ES has continued to stay in its current range between $3,693 and $3,724. With /ES being close to major zones during OPEX, see if /ES can break through toward the downside. My two main downside targets are $3,639 and our previous POC level of $3,604.

Use our downside structure, forming from our key levels of $3,776 and $3,751, as a roadmap into the end of the week.

My favorite setup after this week’s earnings is TSLA. As it continues to hold $203, see if it can bounce off $205 toward Thursday’s high of $215. If TSLA breaks $203 my major downside target is $197.

In the video above, we’ll discuss key zones and major levels to watch on /ES. We also discuss how TSLA can be a compass and/or a great setup to end the week.

Check out my most recent webinar on how I’ve scalped consistently in this market.

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An interesting week is ahead of us as we approach earnings season.

Reports worth noting this week are Goldman Sachs (GS), reporting before the open on Tuesday, and Netflix (NFLX) reporting after the close. On Wednesday morning, ASML Holding semiconductor reports (ASML), followed by Tesla (TSLA) and Lam Research Corporation (LRCX). Ending the week, Snapchat (SNAP) will report after the bell.

Keep in mind one bad earnings report could guide the market much lower. Let’s see how the market reacts.

Last week the S&P 500 (/ES) broke the low of the year at $3,571 on the Consumer Price Index (CPI) report. In one day, /ES created a new low at $3,502 and reversed back to the daily 21 exponential moving average (EMA) at $3,722. /ES rolled back toward $3,587, ending the week messy on Friday.

Be open-minded this week as the market is making large rallies and reversals.

Two targets to focus on this week is the zone below structure at $3,639 and the overall structure from recent highs around the daily 21 exponential moving average (EMA) at $3,722.

Once we approach this structure, I’ll be looking for a potential rollover. Two key levels to the downside are the previous low of the year at $3,571 and the new low of the year at $3,502. If /ES breaks $3,502, my major downside target is the pre-ovid highs at $3,397.

In the video above, we’ll discuss key zones and major levels to watch on /ES. We also discuss how AAPL is our major compass for the market and its key structure to watch.

Check out my most recent webinar on how I’ve scalped consistently in this market.

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The short squeeze theme continues.

We’ll review the “pieces of the puzzle” that we’ll use as an indication of a major trend change.

The Volatility Index (VIX) appears bullish. As long as the Volatility Index (VIX) is above the rising daily 21 exponential moving average (EMA), is in a daily squeeze, and has daily and 4-hour Big 3 buy signals, the market is in trouble.

The next piece of the puzzle, the U.S. Dollar Index (DXY), has a squeeze, is above its daily 21 EMA, and is also looking bullish (also a problem for the market).

HYG (junk bonds) also hasn’t changed as price is below the falling daily 21 EMA with Big 3 sell signals across the board.

In the video above, we’ll review the bigger picture structure on the SPX, break down the individual sectors, and list our current open positions on AAPL, WMT, and LNG in the Compounding Growth Mastery.

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Wow, what a day. Thursday had insane price action with a huge gap down after the Consumer Price Index (CPI) reported, a stop at a major zone, and a monster reversal up.

It’s all about economic data this week, and Thursday’s price action is proof of why we want to pay attention to the economic calendar. The CPI report woke up the market and dropped it heavily before the major pop.

On Friday, Retail sales will report before the market opens. News accelerates technicals, so be wary of how the results impact the market.

The biggest thing that was our focus this week was the low of the year at $3,571. We laid out targets below at $3,541 and $3,506.

After the CPI numbers were released, price hit our major zones below, broke back through the low of the year, through the CPI candles and liquidity zone, and hit the $3,700 range we’ve been discussing.

In the video above, we’ll lay out key liquidity levels and zones to watch on /ES and the Volatility Index (VIX).

Learn how I find new SPX trades 5 days a week using my scalping strategy. Watch the replay of my free webinar on Wednesday, October 13th here.

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The S&P 500 (SPX) short squeezed into Thursday. SPX never reached above the 21 exponential moving average (EMA) and continues to show a daily Big 3 sell signal. With no true confirmation for an entry, the best thing we did this week was to stay patient and not get caught up in the short squeeze. 

Keep in mind that SPX is showing its first daily negative Squeeze Pro histogram since 2008. Now that SPX is showing bearish momentum and under the 21 exponential moving average (EMA), it could indicate that our uptrend from this year is near an end. 

With SPX gapping down on Friday, this leaves us heading into the weekend with the path of least resistance to the downside. Let’s take a look at the most important pieces of the puzzle heading into next week.

In the video above, we’ll review SPX and the pieces that are coming together to show that the change in trend is near. We’ll also review our put credit spread UNG position from this week and the call credit spread in AAPL for November expiration in my Compounding Growth Mastery.

Stay Focused!

There is one highly-anticipated report leading us into the end of the week, Non-Farm payroll on Friday at 8:20 a.m. Eastern. Also, keep in mind the Federal Open Market Committee (FOMC) minutes will be released next Wednesday, October 12th.

Monday’s newsletter unfolded perfectly with the S&P 500 (/ES) recovering the low of the year at $3,571 and pushing toward the gap fill from $3,735 to $3,763. /ES rallied through point of control (POC) at $3,792, hit the 21 exponential moving average (EMA) at $3,818, and is consolidating into the end of the week.

The /ES Point of control (POC) moved from $3,669 to $3,792 in the new month of October. This level is important as that is where the most liquidity is and the most buyers and sellers are. 

If /ES can’t hold $3,751 my first target is the structure around $3,720. My second target is last month’s point of control (POC) at $3,669. If /ES continues to hold $3,763 see if it can get through the 21 exponential moving average (EMA) at $3,818 and hit my main upside target at $3,875.

My main focus to end the week continues to be SPX. Watch the video above to see which key levels and structure I’m noting on /ES.

Tune in to trade SPX and other potential opportunities in the market with me live in the Simpler Day Trading room, try a one-week trial!

Stay Focused!

We have a volatile final quarter of the year ahead of us. This week’s two reports in focus are the ADP employment report on Wednesday at 8:15 a.m. Eastern and the Non-Farm payroll on Friday at 8:20 a.m. Eastern. 

Last week ended red with the S&P 500 (/ES) struggling to hold structure around $3,700 and breaking major levels to the downside. /ES dropped through its previous low of the year at $3,639 and closed at a new low at $3,613. Overnight, /ES created a small gap toward $3,587 putting in an even lower low.

Pay attention to the previous low of the year at $3,639 and the trendline structure we created above. Be cautious overall for upside opportunities; however, if /ES can hold $3,613 and head higher, see if it can break $3,639. From there, my upside target is the gap fill from $3,735 to $3,763.

For the downside, see if we reject the trendline structure and break $3,613. From there, my first target is $3,541. My second target is $3,500. Be mindful that if /ES does not pop, we could dive to those levels quickly. Try not to chase and instead, look for pops for potential short opportunities.

The Nasdaq-100 (/NQ) struggled with its levels last week and broke its previous low of the year at $11,068. It put in a new low of year near $10,979. See if /NQ can retest $11,068. If so, my first target is $10,942 and my second target is at $10,813. See if /NQ will guide the overall market lower.

My main focus to end the week continues to be SPX. Watch the video above to see which key levels and structure I’m noting on /ES.

Tune in to trade SPX and other potential opportunities in the market with me live in the Simpler Day Trading room, try a one-week trial!

Stay Focused!