SPY July 7th 2025SPY July 7th 2025
Day 1 of journaling my day trades on SPY. I am going to start journaling my ideas every night if possible in order to fine tune my setup and to analyze my wins and losses. I will be using Renko (Traditional, 2 box size, 1m) as my main chart, Range Bars (50R, 100R, 200R, or 500R), and candle sticks (various timeframes) to identify supply/demand, price ranges, and trends - placing a high emphasis on volume as it applies to the Wyckoff Method. I will also occasionally refer to real time options charts and VIX, however I will primarily use those for my entries during the day.
Each day I will provide setups for a bullish and bearish bias, which should help minimize instances where the price moves against me - with slow reactions leading to holding losing trades and hesitating to enter a trade on the side of the new trend. I’ll try to come up with a consistent format as time goes on. For today, I will go down the list of my indicators and provide notes that fit the bias of each trading strategy.
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Bullish Analysis
Renko: Strong breakout from ascending channel on June 30. Fisher Transform is signaling continuation. A retest of the top of the channel would take the price back to ~$618.
100R ($1) Chart: Price is in an uptrend being supported by high volume. 34VWMA (purple) is above 200MA (green). The bounce on July 2nd (around $616) was supported by a high volume node, indicating genuine interest pushing the price higher.
30m Chart: Price closed on July 3rd at the top of an ascending channel inside of a larger ascending channel. Since the larger ascending channel is one of strength, it can be assumed that the smaller one is a sign of strength as well. A break too far below the lower end of this smaller channel would be a sign of weakness, which does not seem to fit the current market structure after last week’s breakouts, but it is still possible that the trend fails. Fisher transform is forming a “hook” pattern that can signal continuation.
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Bearish Analysis
On a smaller scale, the price appears due for a pullback, which can fit both the bullish and bearish trading ideas depending on where the market opens.
Renko: The price closed at the top of an ascending channel on July 2nd and will find more buyers upon a test of the lower band and the anchored VWAP.
50R (50¢) Chart: If the price pulls back to the bottom of the channel (around $620) this would coincide with a retracement of 0.618 - which is a key fib level. A break below the 1.00 extension ($616) could signal a break of the uptrend - a $9+ drop if an entry can be found near the top of the channel, not too bad.
5m Chart: The price left a gap down to $620 on July 3rd. Filling this gap could provide important liquidity to propel the price higher. Additionally, The high volume at the start and end of Thursday’s flat trading day (with low volume in between) could be a sign of accumulation or lack of sellers.
1DTE ATM Put, 2m: If a more prolonged (and profitable) downward move is expected from smart money, we should see volume increase for ATM puts during the session. Depending on where things open, we could see a potential spring/false bearish breakout (below $2.20), or a true bullish breakout (above $2.80). Using an options calculator, $623.75 on AMEX:SPY would set up the Spring and a drop below $622.50 could confirm the put breakout.
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Targets
Calls: Enter $618-$620, Target $625-$628, Stop Loss $617.75
Puts: Enter $623-$625, Target $620, Stop Loss $626.25
To conclude, overnight action on CME_MINI:ES1! and the gap up on TVC:VIX shows that the price is already retracing. The top of the wedge for VIX would be just above $20 - a key level to watch for a reversal. Unless the upper part of the channel on SPY is tested and rejected again after the open, I will sit out and wait to hit the bullish targets. We are still in a strong uptrend after last week’s breakouts, so going short is the riskier bet anyway, as buyers could step in at any time.
Looking at ATM calls and puts side by side (bottom two charts), it is clear that calls were not heading into today with a good setup. It would be worth taking a chance on puts if a Spring forms (below $2.20), which, again, would correlate with AMEX:SPY hitting $623.75 during the session - and not much higher.
My main idea for the start of this week is to look for a good pullback for calls, so I will be patient and will try not to force anything. If smart money has a bullish sentiment, there will still need to be a short accumulation phase for calls so I will watch to see what the chart is doing for ATM calls around $620.
