Monday morning trade setup
Im aware that there is going to be a down side movement thru 4100 on $SPX on Sunday and Monday morning, it may be the last of the 20 day cycle. If it is strong, and finds volume, it must be the NEW 20 day cycle starting, which would take price well above levels from last week and last month.
The idea for the trade is two fold:
Try to find a reason to get short monday NY open as stocks make a dash for the lows to see how far they can go.(This is outside the scope of my usual trading and quite advanced for swing traders). [***If the premarket is above the Friday high, then get long on a buying imbalance early in the open with volume accompanying the trade (this is probably not going to happen, and you can go to step 2 below)***]
Wait for consolidation on the 60 minute bar at the lows over the next trading day there should be big entries and new buyers on good stocks for a big rally to the 40 day cycle peak. I am very fond of just using credit spreads but weekly ITM call options are good too.
*If it takes along time to make a 40 day cycle peak, then that is more bullish than previously thought. And all of this is dependent on next week not falling through any structures that it makes for itself intraweek beforehand…*