8.13 Trust the Process

Back to my regularly scheduled analysis. Plan. Running commentary. Trade justification. And, recap.

Mandatory to trade:

• Written analysis focusing on trend, PO, ATR levels and probabilities.

• Wait until a stupid obvious setup on the 10m

• Identify CaSPar

• Check if premium is squeezing with divergence

• Where is the stop loss? Why? What % of the port are you willing to risk?

• Scale in

It is so much easier to accept the loss if I've written out my justification for entering. I will not miss the trade. There's no so think as missing a trade.

Obvious setup --> Written justification --> Loss calculation --> Entry at CaSPar only

What is happening? What is more likely to happen? No predicting.

We don’t control what happens, we control how we respond to what happens.

How am I going to act depending on varying scenarios?

Daily / Quarterly ATR

Yesterday marked the beginning of the daily squeeze firing. We gapped open today and have remained above all day. We are in price discovery area so it's best to go with momentum until otherwise confirmed. We are crazy bullish. The only reason to think otherwise is if we start rounding with PO failing to put in a HH. That would signal the start of some mean reversion. But we'd likely need to move higher and trap late bulls first. We've hit the quarterly 382, with the 500 currently acting as a resistance point. The 500 level being hit gives very high probabilities for the 618 to hit by end of quarter.

4h / Monthly ATR

Also extremely bullish. 382 level has been hit. Further upside more likely. The 9a 4h candle on SPY... Bearish engulfing three candle evening star reversal, with a PO mean reversion dot firing. The 1p candle must close below the 9a low to confirm downside. Given the ribbon acted as support, it is likely to continue higher to trap late buyers before moving down. RAF has also fired down. We're on the 4h time frame so this does not mean we're headed down or sideways right away. The swing call triggers are clear support and could likely retest before a more meaningful move higher.

Hourly / Weekly ATR

Bullish! 10a put in a tweezer top engulfing candle that eventually led us to the H21. For three hours now the H21 has acted as clear and firm support. The 1p hourly has created a potential tweezer bottom of the H21 but ultimately just an inside candle. MD 382 has been hit which signals more upside by EOW. SPX bottoming coincides with PDH and the Hourly 8e. Support is at the top of the gap and any long entry should be considered there. Unless a clear reversal pattern emerges on lower time frames with a higher low as potential entry.

Last 6 10m / Daily ATR

We gapped open above the 382 level. Ran to just below the 618 before rejecting and making are way down to PDH and PDC. The ribbon has clearly flipped negative, with the call trigger and 10m21e acting as resistance. The last 6 candles... We are trying to ivommy. We have a W with EL and PO divergence. We've since reclaimed the 21e and currently breaking out from the 48e and testing the call trigger (previous resistance). On both charts while we deeply penetrated the 500 level we fell short of tapping the 618. That is still open and a target if we were to continue higher. However, we're currently at previous call trigger resistance and supply.

10m plan

We're trying to iVom. But we're currently right at previous resistance and supply. The bias is to the upside with the 618 very much still in play and the Hourly ribbon holding as support. I will wait for price to react to support, which is currently potentially at the 10m21e or certainly at the PDH PDC top of gap. Extreme caution with shorting given the overwhelming strength.

• Wait until a stupid obvious setup on the 10m

• Identify CaSPar

• Check if premium is squeezing with divergence

• Where is the stop loss? Why? What % of the port are you willing to risk?

• Scale in

Stupid Obvious

4 rising candles on the 10m met with resistance at the call trigger, but the 48e now holding.

Right now an ivom is signaling further upside. Given upside I must wait to see how price reacts to 10m support only. This is at the previous candles low and then the PDH. The 4640c showed a squeeze with divergence and successfully ivommed on the 3m. We're now back testing the 21 and holding for potential continuation. On 3m spx we've broken and now holding the scalp call trigger and ribbon. We are at resistance and not in a place to long. If I were to short my SL would be at the previous swing high.

It is more likely to continue higher but we are at resistance. I will wait. So, what if I miss. 10m is in a squeeze, vix in a squeeze as well. But in both cases at previous pivots.

48 continues to hold. 3m21e premium holding. 3 to 4.5.. But, we wait for obvious on the 10m. And we jave get another chance.

If it's not obvious... when in doubt stay out!

I believe we're headed higher, but we are still at resistance / call trigger...

Inside candle but deep dips got bought up and the 48e held. On the flip side the call trigger continued to act as resistance. But the bias is up, so let us see. Worst case I got into early, I get stopped out and can get back in?

Struggling to breakthrough the call trigger. And, struggling to get above the previous swing high supply zone.

Tiny range. Chopping. Ribbon continues to hold, call trigger continues to reject.

But we were making a higher low. Previous support was holding. Beautiful entry and final exit.

Trade 1 & 2

I waited until painfully obvious. Quite simply the bias was bullish. Support continued to hold despite running into previous supply zone / resistance at the call trigger. We had a very quick scary high volume dip that once subsided established a higher low. I waited 4 10 minute candles of the 48e continuing to hold despite the 'scary' drops preceding the eventual hold. That gave me the confidence to enter. For Trade 1 I entered with a very small position and exited rightfully so at the previous resistance, leaving one runner. The second trade I added a bit more size given the growing confidence in the thesis. I sized a bit larger, hence took most profit early, but the final contracts I waited until my original take profit.

Bias up. 10m48e holding despite scary drops. Entry at the 3m21e and scalp call trigger as it continued to hold. Simple.

This is the right way to trade. Slow analysis. No concern about missing. And, waiting until painfully obvious. Then scaling in slowly.

Golf: Balance, Follow through

Tennis: Low, Forward

Trading: Write, Scale

Write and scale. Write and scale. Write and scale. Write and scale. Write and scale. Write and scale. Write and scale. Write and scale. Write and scale. Write and scale. Write and scale. Write and scale. Write and scale. Write and scale. Write and scale.