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Thursday, August 21st

“You never know what worse luck your bad luck has saved you from.”

– Cormac McCarthy

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Markets Today

🌏 Asia-Pacific: Down

🇪🇺 Europe: Down

🇺🇸 United States: Down

🛢️ Oil: Down

⚡Crypto: Up

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Presenting August’s “Scorchin’ Hot Stocks!”

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Major Market Events 

• US stocks slide on jobless data and Walmart miss — Dow leads losses as weak retail results and labor data shift focus to the Fed’s Jackson Hole meeting
• Trump ramps up pressure on Powell — President escalates attacks on the Fed chair, accusing him of resisting rate cuts amid mounting political heat
• Walmart posts weak quarter, shares drop — Retail giant’s sales growth slowed, with quarterly profit missing expectations and shares falling

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🤔 My Thoughts

The 3pm SPY Trick

A simple diagonal for overnight base hits

 

Most days, I don’t need a crystal ball. I need a plan I can run the same way, over and over.

Here’s mine.

Late in the day — around 3:00 to 3:30pm — I look at SPY and decide which way I think it leans into the next morning. Not a hero call. Just a small edge.

If I see it, I use a simple options structure that keeps risk tight and aims for a base hit by the open.

It’s called a diagonal debit spread, and it sounds scarier than it is.

In plain English, it’s two options in the same direction with different expiration dates.

I buy the option that expires later and is near the current price. I sell another option that expires sooner and sits farther away in my direction.

I pay a small amount up front, and as long as I close both options together before the short one can assign, my worst-case loss is my initial cost to enter the trade.

Because the short, next-day option loses value quickly overnight, even a small push my way can put me at a quick profit the next morning.

Think of it like this:

If I’m mildly bullish near 3:10pm and SPY is around 640…

• I’ll buy a Friday 640 call
• and sell a Thursday 645 call.

If SPY opens at 642 or 643, the call I bought is worth more and the call I sold decays. That difference is my win.

I’m not trying to squeeze every penny. I take a simple target and get flat. Then I reset for the next day.

Timing matters. Late-day entries cut noise. There’s less time for random headlines to shake me out before the close, and I’m not sitting in the trade for days.

I’m in, I sleep on it, I check the open, and I decide fast. If the market gives me a quick gain — about a quarter on the position — I ring the register and move on.

If it opens flat or slightly against me, I keep the loss small and step aside. If it gaps hard the wrong way, I close both legs and live to trade another day. Size stays small so none of that is stressful.

What tells me which way to lean? Price.

I use simple levels — yesterday’s high or low, a clear supply or demand zone, or a recent shelf that broke.

If price is holding over a level late in the day and the tape looks steady, I’ll lean long. If it’s slipping under a level and can’t pop back, I’ll lean short. No magic, just reading the auction like a grown-up.

This approach works for me because it removes the guesswork, limits risk, and sets me up to win with a modest move. I’m not trying to predict the whole week. I’m trying to rent the next morning and get paid for it.

I previewed this new method on Profit Panel as we get ready to roll it into a paid product.

That’s why it pays to tune in to Profit Panel every weekday morning at 11am Eastern — you catch the ideas early, while they’re still simple and free!

Click here to watch the on-demand replay!

And don’t forget to register your spot here to join us next time we go live!

To Better Trading,

Alex Reid

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