SPX Intraday Trading with Deep Market Internals

Trading the SPX Index Options has several advantages :

• It’s a Cash settled Index, so you don’t have to worry about Assignment
• Several expiries in 1 week with great Liquidity
• No stock specific shocks like News or Events
• Plenty of Deep Market Internals data available

Some of the commonly known Market Internals are the $VOLSPD (Up Volume minus Down Volume), $ADSPD (Advances Minus Declines), and the TICKS indicators.

The TICKS is perhaps the lowest denominator of available Market Internals data, since it is the “collective pulse” of the entire basket of the S&P 500 Stock components, captured at the millisecond level. Every UpTick and every DownTick of each of the 500 stocks in the Index is captured and the result of Up minus Down is the TICKS reading. But the TICKS indicator can be noisy.

Please take a look at the TIKSP (the version of TICKS for the S&P500 Index) image below.

As you can see, it is hard to gain any meaningful insight from such a noisy chart. This is why we need a Custom Algorithm to unlock the potential of the information contained within the TICKS or TIKSP.

The Real Power of the TICKS

If we can keep a running total of the TICKS value as a Cumulative number as the trading day progresses, we can truly understand the state of the SPX from a Deep Market Internals perspective, as it is developing through the day. This can provide some incredible SPX Intraday Trading opportunities. This video explains this concept in detail. Also discussed is a Customized indicator CustomRSI which is a highly effective variant of the commonly used RSI indicator (Relative Strength Index). Both the TICKSPX and the CustomRSI used in this video are Proprietary Algorithm based indicators.

Guidelines for SPX Intraday Trading with TICKS

Once you understand the power of the data contained within the Cumulative number of the TICKS indicator, and the ability of the CustomRSI indicator to assist us in staying in Winning trades, we need a few Rules and Guidelines for the proper implementation of trades. Following this framework will position an SPX Intraday trader to aim foir just the best possible opportunities, which may come up just 1 or 2 times a day. But they can be massively successful trades, with the potential of creating about $1000 to $2000 profits each day by trading a 35-Delta Out of The Money SPX Option, and with just 5 contracts.

The Trade guidelines provided in this video has a few precise rules that can unlock massive potential in SPX Intraday trading opportunities. It assumes an account size of about $30,000 so that we can stay clear of Pattern Day Trader (PDT) rules, and position size is 5 contracts. Please click the image below or here to play the video

Unlocking SPX Intraday Trading opportunities with a Trade Plan

Now it may become clear how we can use a relatively small account size to quickly build it up, using sophisticated Algorithms and indicators to collect profits of $1000 to $2000 a day. To achieve these targets, we must follow a strict Trading Plan. The video below describes this Trading Plan (Please click the image or click here to play the video)

SPX Intraday Trading Variants for Stock and Option traders

Finally, if you’re a Stock trader and don’t trade Options, you can use a number of other trading instruments. In fact, using the SPX TICKS Algo and the CustomRSI indicators, you can trade the Index ETFs SPY, the 2X Leveraged SSO and Inverse 2X SDS. If you’re a Futures trader, you can trade the /ES E-Mini Futures itself using these powerful tools.

To make things even better, the Algo and Indicators can be used on a variety of Indices including the Nasdaq-100 NDX, the Russell 2000. Stock traders can trade their ETF variants like QQQ and IWM.

Please watch this video to understand all the different instruments you can trade using the SPX TICKS and the CustomRSI indicators. Please click the image below or here to play the video.

For more information on SPX Intraday Trading opportunities using the powerful SPX TICKS Algorithm, and the CustomRSI indicators, please email [email protected].

Hari Swaminathan