8 May 22 SPX Weekly - New Lows

Accuracy: 17/21 (80.95%)

SPX below 4400 - Correct

I missed last week's post as I was too busy. The week before got correct SPX stayed pretty bearish still even for the past 2 weeks.

Last Week

SPX rallied pretty hard after FOMC and closed above 4300 followed by the next day it got entirely sold off and finally rejecting the 4100 area towards the end of the week.

Crazy volatility and manipulation going on. We do see some slowing down towards the downtrend but it's still pretty much on a downtrend.

Looking into the 30 minute chart, 4300 resistance area got tested 3 times in the past 2+ weeks. New lows are still forming again and again which continues the downtrend momentum.

Upcoming Week

For next week, with support and resistance forming a range between 4060 to 4300 and continuing the downtrend momentum. I'll continue to lean towards price moving downwards but maybe slower around the 4000-4100 area.

I do also anticipate more big moves coming because of the economic calendar so lets go there.

Economic Calendar

Look at the events next week. There's so many FOMC members speaking almost everyday. Together with CPI, PPI, Jobless claims continue to spur the market movements. As I mentioned before, more impactful events more likely causes red than green especially with the highly volatile and sensitive market now. Every little thing that appears in the news can be interpreted and manipulated into big market moves.

So it might actually go lower since now 4100 showing some resistance but price did dip down. We might see it slowly testing 4000 next week.

Prediction

So I remain downtrend on my prediction with 4300 as the triple resistance target.

SPX below 4300

My Trades

Nowadays I'm not doing anything very consistent and mechanical. Mostly short DTE options based on that day's price movement. Currently I'm holding on a broken wing butterfly on the call side SPX:

-2 x 4305
+1 x 4355
+1 x 4280

Entered on Friday collected $1.45 and is currently already at 95% profit. Will hold it to expiry as a potential bonus outcome that SPX runs up to 4300 resistance area by Wed expiry.

Depending on Monday premarket price movements, I'll look to add another BWB. As I'm still testing the detail characteristics of a BWB, there's no fix rules of entry or exit. I'm trading it with discretion. The only few things I try to stick to are:

• try to keep it around or below 10-15 delta
• try to stay within 3-7 DTE
• try to get 25-30 wide wings and 2x the width on the further wing

I'm still working on refining the trade to get more protection out of it. Just documenting it here for me to recap later.