10.29 PM & Powelball

Checklist. Size. Checklist. Size. Checklist. Size.

Rate decision at 2p. Jpow starts speaking at 2:30p. Volatility expected.

I do not have to trade. I do not have to put my capital at risk. I have to go through my checklist to initiate a trade. I have to size extra small because the volatility can produce enough upside while the lateness in the day opening me up to full downside.

Do less.

Daily

Bullish and crazy extended. We're more than 2 std dev above the 21e. I certainly wouldn't get into swings here. We could obviously go up but it's not a great entry for calls. Squeeze fired Monday, so plenty of room left to drift higher.

6750 SPX is previous resistance. 6550 SPX is very clear support. 2 bull gaps below that at some point will likely get taken out. Top of top gap is 6840. Currently hugging 6900.

Quarterly 382 has hit which signals a high likelihood of 7035 by end of quarter.

4h Stalling / Flagging at the monthly 618 level. Everything bullish but can't enter because extended from the ribbon. Better RR is entry in the ribbon. We're also sitting right at the extreme level on PO. Two reversion dots have fired on SPY with no test of the 21e as of yet - 30-40 points down. On SPY the monthly 618 and ribbon has held for 4 candles. What has held will continue to hold.

Hourly

MD 786 on SPX tapped. Puts +1 by EOW in play - 6950. Two reversion dots from 100+ have fired indicating a need to tap the 21e. Last double reversion dot was just from the 618+ level and pushed a moved down to the H200 the next day. 618 and H13 just below. On SPY the reversion has already happened. Since Monday a string of higher highs with lower PO values with all today being glued to the H21. Reversion has completed but we are squeezing with a downward bend. As long as MD 618 holds there's no reason to consider downside. Bearish engulfing at 10a but ribbon held. And continued to hold since. Same on SPX.

MD 618 on SPY is the 705 retracement from yesterdays SRF level to this mornings high.

Hourly is bullish until proven otherwise. If on SPX the H8 / MD 618 holds and on SPY the H21/ MD 618 holds then I'd be justified to enter calls at support. Given the volatility expected probably better to wait for price to react to support if not lower. Hourly trend and trend line is very much up.

That is the appropriate time to consider calls. If those levels break with conviction, then calls are off.

10m

SPX 382 has been tapped. We've yet to dip down to PDC with the bullish ribbon holding everything up. 500 and then 618 in play. Looking like a morning star reversal off the 10m 48e which has been tested 2x and acted as support, both times at key psych of 6900.

SPY ribbon is extremely thin. Choppy. Morning star reversal as the 2nd low of a W with divergence indicates a move back up to resistance which is at PDH/call trigger. Squeezing. Range is 382 to PDC with call trigger as midpoint. If we close above the 48e that could signal ivom, but the call trigger is just above, plus support would still be at the morning star. If it doesn't then it's just a retrace to supply before heading down.

Vix is also stuck between PDH and call trigger. Very choppy. Important to wait until beyond obvious and size small.

Strikes

6890 - PDC as downside. 6920 - HOD as upside. Bias is sideways with a HTF tilt up. Caution required.

Call strikes are more bearish but with rising PO values at equal lows. Will likely take longer to head up. Versus 6890 puts a little more bullish of a ribbon also with rising PO.

Downside is the bet.

6890 just tapped LOD with higher PO and bouncing. $8 to $10 on that move. Range is 6900 to 6910. Will wait for break. Or enter puts at 6910. TP would be next day level down but will have to stomach the volatility.

I'm wanting to trade. I feel like I have an edge and eager to trade. I need to defer to the checklist. It usually takes 30 minutes on the 10 to confirm a direction. I have more than enough time. Best to miss than risk capital. Eager, but can also just wait for a clean break. I don't need to catch the first move.

Having emotions is fine. Caving time is not necessary. I don't need to trade. I can miss it or wait for my edge.

Ugh. So I had it. I was too early. And not accepting of the loss. My trade was a 10m justification but I used a loss of the 3m48e as justification to exit. I exited at $8 and minutes later we reached $28.. Instead of ema's I need wider stops with ATR levels. Though I don't actually think it was the incorrect move to exit given the ivom signal. However the day call trigger and scalp close were both the next relevant levels up and niether of those broke.

If down - where is the next level up - that is my SL or entry!!

Contracts at $40

Even when I was exiting I knew I just needed to wait a bit. I exited at $8.3, we dipped to $7.2 only. Why was I not willing to risk $100?! Fear had me thinking I was going to lose it all. Or lose in general. Even a full 100% drawdown was well within my acceptable loss for the trade. I have to be comfortable taking the loss.

Of course because I 'missed' it then I'm less patient for the next trade. So then I get a shit entry and then I'm suddenly okay stomaching a loss versus if I just stomached the initial loss I'd be well in profit.

I need to absolutely be glued to the 10m. The 10m gave me justification to entry. The 3m scared me off. But, even though I exited, I did manage risk. Instead of being annoyed I missed and trying to make up for it, the correct thing to do is adhere to the checklist. Wait for an entry on the 10m.

Because that's what I did - as it eventually became obvious - returning 150% on several cons on the trade.

Just because I missed it doesn't mean there's not another trade. If anything it was suddenly very obvious the direction we were going and it was more about being patient enough to have price dictate where resistance was - ON THE 10m!

I also need to consider that I am not buying cons to hold. I'm simply trying to grab a part of the move, meaning I can go OTM a good deal as long as I'm diligent about exiting at the next level.

First trade

Call trigger continues to act as resistance. But the 10m200 acting as support. The 10m21e kept holding as resistance and that was enough justification to enter puts. Unfortunately I did NOT actively identify resistance - by swing pivot and ATR level. I then entered early and then exited early. I exited essentially where I should've gotten in. Wider stops. 10m chart establishes everything. I exited with BE and premiums immediately moved 6x.

Second Trade

Hourly lost the 48e. Sell is on. BUT I still need to wait for resistance via the 10m. If I had waited for the 10m ribbon / ATR level of PDC / previous support - that was the ideal entry for puts. Instead I got in early. Averaged down as I had more conviction in the trade. And, while I'm green for the day. Did NOT adhere to position sizing rules. So, that's ultimately a huge knock against my outcome for the day.

In the best I'd celebrate ending green. But, I'm frankly very pissed I allowed myself to breach the position size. There is never a need.

Of course I start the post with I don't need to trade. Fed decisions are extra volatile. An extreme reluctance to trade is required. Smaller size.

Annoyingly. I had a smaller size. I just didn't have confidence. I exited after 6 points against me, only for it to then go 50 points in my favor... That one contract - If i truly accepted the loss, instead of being scared of a 23% drawdown, which even then only put me break even on the day - My exit level was the equivalent of a 100% return and it ultimately ran 300%.

Apparently even with small size I have trouble accepting the loss. And, it's because for whatever reason I'm putting pressure on myself to win every trade or a lack of confidence that even if I do take a loss, it doesn't matter in the long run because my edge has proven to be around 80%.