SPY Trade on Feb 7, 2022 15:17 from JRockTrades: Tradervue User Stock Trades.

Big Picture

SPY has been a mixed bag lately, having traded as high as 480 before pulling back to 420. Volatility has been high mainly on increasing inflation concerns, which investors see resulting in rate hikes this year and slower growth. Other potential areas of headwind also exist in the market, which will come into play later in this trade.

Technical Setup / Reading the Tape

SPY was pulling into the HOD. It made a new high over 451 by pennies, but there was no flurry of green prints and a definite move higher. It came back below 451 and I entered short risking the high of the previous minute.

Trade Management

I was 98% of the way to stopping out on the day before this trade. I have DAS setup to liquidate my positions if I hit my stop, so it really was a hard stop. I had the very tightest risk profile on this trade.

As the trade started to work I added a momentum lot about 40 cents into the money. I covered those pretty quickly, but they did add to my profits.

As the trade was on, news broke about potential conflict between Russia and Ukraine, which has been simmering in the background, but may become more relevant in the near future. This caused the SPY to sell even harder and I was able to cover at increasingly better prices. I put my trailing stop on the small position I had left at $447.25 and that got hit right before the closing bell.

Conclusions

What started as a technical level stuff kind of trade turned into a breaking news trade that worked in the direction I was already positioned. I definitely benefitted by news coming out about the imminence of war between Russia and the Ukraine that led to an exaggerated move to the downside with little retracement. I managed to make 35% of my daily stop back on this trade, while only risking 2%, which is incredible risk to reward. Happy to be lucky at the finish of the day.