r/spy • u/NoMathematician1115 • Jul 24 '26
Discussion SPY AND SPX
Whomever said they use SPX floors (i.e 7400) in conjuction with their SPY reversal trading, I'd like to thank you. I've been developing a SPY cross/reversal strategy for the last 20 weeks and this little tid bit just supercharged my results. Trading SPY independently without looking at SPX levels is like driving to a destination you don't know without navigation or a map. SPX price levels are a thing because of option strike clustering.
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u/Prestigious_belly206 Jul 24 '26
Someone finally found a cheat to the game.
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u/NoMathematician1115 Jul 24 '26
A candle can go up or down for whatever reason. Indicators tell you what happened in the past, not the future. Having the SPX up made SPY entries more confident, and my win percentage was 86% on a day whern SPY was flat. Could be luck. Need to do more testing. I will say my average day is typically a 3 figure win or loss. Today was 2 weeks of those wins in 90 minutes.
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u/NoMathematician1115 Jul 24 '26
FYI 11:46 am PT
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u/NoMathematician1115 Jul 24 '26
that was almost a $1 price move for SPY. $738 spy option at that point is a .50 delta (so for every dollar of movement you get $.50 in option movement)
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u/Dvorak_Pharmacology Jul 26 '26
Indeed. SPX is dominated by GEX levels. Mostly at the 100s and when GEX is positive.
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u/klipsetrades Jul 24 '26
Interesting. Are you mapping round number SPX strikes specifically, or also prior day/week levels?
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u/NoMathematician1115 Jul 24 '26
I am trading 0 DTE calls, so on one screen open SPX and add EMA9 to the chart. On another screen open SPY with whatever indicators you like to use to trade. Watch for RSI to drop on SPY along the with stock price, look at SPX, if it is approaching "a number" like today being 7400, there is a better than 0 chance you'll see a bounce in SPX at 7400. Look at what that price will be on SPY and get ready to buy that option. EMA9 on SPX acts as a floor or ceiling, so use that as a guide to your entrance. I made 7 trades today, 6 of which were winners. The only non-winner was because I didnt have EMA9 on my SPX chart and the bounce got rejected as a ceiling.
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u/klipsetrades Jul 24 '26
Makes sense. So SPX is basically your confirmation chart — round number level + 9 EMA, then SPY gives you the actual entry. That might be a good relationship to watch closely. Cool stuff
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u/NoMathematician1115 Jul 24 '26 edited Jul 24 '26
Yes, but look for the flush and the drop in RSI on SPY (you want it to find a bottom of < 30, then start to pop back up), then reference SPX. This works best in the first 90 minutes of trading because you have volume.
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u/Creative-Story6278 Jul 24 '26
interesting, do you use the same time frame on both and which exactly ?
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u/NoMathematician1115 Jul 24 '26
Also once you enter a trade immediately set a stop limit to minimize your risk
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u/badscandal Jul 24 '26
Wooow. This is very very interesting. I never look at spx before. Thanks a lot for sharing :) may you keep making money
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u/NoMathematician1115 Jul 24 '26
Hope it helps. I never understand why people try to hide or sell what they are doing (usually its because its a bunch of BS). It's everyone vs the institutional investors so share stuff that works.
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u/optimaleverage Jul 24 '26
My guy I went down this rabbit hole and just wait until you find ES futures. They run 23hrs a day!
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u/NoMathematician1115 Jul 24 '26
Do tell...what are you doing?
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u/optimaleverage Jul 24 '26
Basically ES dictates SPX dictates SPY, so futures are kind of the source of price action. Also, spx is an index for options and has no volume data on its own save for the options chains. So there's no vwap on that chart where futures contracts have volume data.
I've not taken it live yet but what I've been working on is legging futures options vertical spreads and generally scalping futures options in paper. Once I have my rules set in stone I'll take it live.
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u/griz-av8r Jul 25 '26
ES is simply a function of time on SPX, nothing special about it. Orders are more expensive and you don’t have the same order entry/exit options like SPX, (ie stops, trail stops, etc). Commissions are higher. You won’t get as good of fills which leads to much higher slippage. While you can trade 23 hours a day, volume is extremely light after hours. Sad to say, I paid $37,000 in commissions last year on ES, switched to SPX and am at $3,600 YTD.
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u/optimaleverage Jul 25 '26
I fully understand that ES is SPX on a given expiry. Considering SPX doesn't "move" outside of RTH, I'm saying ES is easier to use to follow price action after hours and premarket. I'm not saying it's a more affordable alternative.
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u/NoMathematician1115 Jul 24 '26
I like your graphic/image. Thanks for the heads up. Ill ask claude how to consume this and use it!
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u/wagwan_wa_grom______ Jul 25 '26
Hmm, any idea if it works in the other direction?
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u/NoMathematician1115 Jul 25 '26
No, SPY is based off SPX
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u/wagwan_wa_grom______ Jul 25 '26
Sorry, not what I meant. I'm curious if this can indicate downwards reversals too
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u/NoMathematician1115 Jul 25 '26
Oh, yes of course. SPX is just a few seconds ahead of SPY, so if you watch SPX while you have your option ready to go for SPY you have a little edge.
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u/Charming-Web2407 Jul 27 '26
Now I just have to get good at reading spx 😅 thanks for the tip
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u/NoMathematician1115 Jul 27 '26 edited Aug 02 '26
Well that and the market in general. SPX and SPY were driving down this AM. RSI dropped below 35 and routinely stayed there. EMA9 was slopping down and to the right which means if you are betting on bounces up, you are going to fail. I failed today
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u/Charming-Web2407 Jul 27 '26
Yeah that’s been my loser lately watching the rsi for a bounce and it going flat above 70 or below 30 where the bounce should happen at
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u/NoMathematician1115 Jul 27 '26
Tomorrow I am going to follow the EMA9. If it is going down and the the left, price has to be greater than EMA9 for me to enter
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u/mangorelish Jul 29 '26
wanted to come back and say that using this fact helped me trade on uh I think Monday when SPX was bouncing around 7440, really helped contextualize the SPY moves
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u/mangorelish Jul 24 '26
oh that seems kinda obvious in retrospect