🐂SPY - BULL TREND - EASY MONEY MONDAY - 10/23/23
Case Study: It doesn't get much easier than this with 0DTE trading. We got a BULL TREND, then a BULL SWING alert and left for maithais (we missed the BEAR SWING)
Summary:
It's Monday and the international chaos we were promised over the weekend never materialized, but still SPY and QQQ open lower. The market had other ideas with RIGD detecting 7 BULLS to 1 BEAR alert during the open session (first hour) on SPY. We got the alert we wanted right after and everyone made money.
Open Session:
This was almost TOO EASY to trade. We left a lot of gains on the table due to PTSD from last week's market action.
We open with mixed flow and price begins to move down, but we took a shot on the BULL at the bottom and boy was it great.
Price returns to the open (blue line) and it's another great time to buy. We don't mind chasing the rally a bit.
At 10:15 we sold the majority of our contracts for two key reasons:
1.) THE MOVE HAPPENED - the low was ~ 418 and the high was 421. You returned 100%+ in less than 30 minutes. Take the money.
2.) RED FLORBS - we see a ton of RED FLORBS indicating traders taking bearish positions after THE MOVE. We exit and wait for what happens next.
BULL TREND:
RIGD works by scoring the Open Session (first hour) and determining a trend for the rest of the session (full day).
You can view the trend in the third module under the chart.
With 7 BULLS to 1 BEAR, it's a 4-bar bull trend. Very strong indeed.
When a BULL TREND is detected, our view for the remainder of the session is that at some point there will be a 2-3 STRIKE MOVE that way.
For strict trend followers, you can select ONLY the alerts that match the trend by enabling KOMODO.
Steven Speelburgh couldn't have written a better story for how well KOMODO worked today, so we'll use this as our case study.
When KOMODO is enabled, you will only see the high probability alerts that match the trend.
We get one instantly.
10:36 RIGD fires at 317 BULL SWING ALERT for the 420 call option on SPY
It's a perfect pinpoint, picture perfect tag that immediately rips up after with zero drawdown along the way to 100%+ gains.
Like we said Spielberg couldn't have done it better.
Total hold time is less than one-hour for a full 3-STRIKE move.
Candlestick charting has come to RIGD, but it's a bit of a work in progress.
Here's how epic the BULL SWING alert is:
Like we say this app is idiot-friendly, but not idiot proof. You do have to make the trade on your own.
SPY goes for one more move higher before a total nuke with all of the gains lost.
That's why we recommend to stop after THE MOVE and go do whatever it is you like to do with your free time. A 100 - 200% return in a little over an hour is epic. Do it every day for a few years and you'll be Bill Gates.
Harder Trade, Bigger Return - 307 BEAR SWING
The easy trade was following the BULL TREND, BUYING THE BULL SWING and capturing the move. However it was not the most profitable for the day.
That award goes to the 14:41 - 307 BEAR SWING.
You have a -7.83% drawdown on the way to a 342.90% max gain or 285.48% end of day return.
That's insane.
There are a few things that make this alert extremely profitable.
TIME OF DAY:
At 14:41 there is only an hour and 20 minutes remaining in the session. The spot price for SPY is 423.13 at the time, so the 423 put is out of the money.
Because the 423 put is out of the money, the contract is cheap at only 0.61.
THE MOVE:
SPY moves from 423 to 420 by the end of the session. It's a 3-STRIKE MOVE.
Catching this at the end of the day is insane.
The mental cheatsheet: No time + OTM with a MOVE INTO THE MONEY = LOTS OF MONEY
Was this alert worth trading?
If we're still trading at 14:41 - this is a strong signal and a must take trade.
First, it's a BEAR SWING on a BULL TREND is in our second tier of KOMODO preferred alerts.
But the reason why we consider it is as follows:
From the bottom at 9:45 to 13:00 we got a 1.59% move for +6.62. That's massive. We consider the BULL TREND / THE MOVE to be complete. From 13:30 - 14:41 the flow is almost completely bearish. There are no more BULLS, only red florbs and BEARS.
If the TREND were to continue, we would expect to see more BULL FLOW. This does not occur and price moves down.
IMPORTANT LESSONS:
The OPEN TREND is the best predictor of price action for the day.
The BULL TREND on SPY at 10:31 followed by the 317 BULL SWING 10:36 is the best high probability alert you can possibly receive. There was no trend on QQQ and volume was lower than average. This did not stop the "other side typically returns higher gains" pseudorule from working once again.
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