I don’t trade the SPY on a daily basis. But I have a few “go to” trades that I will make when they trigger.

• Fade a pullback to a recent S/R level in the direction of the higher time frame trend (Trade2Hold)
• Fade a pullback to a recent S/R level against the direction of the higher time frame trend (Scalp Trade)
• Long/Short breakout of multi-week S/R level (Trade2Hold)

There are probably a bunch of other trades I could make but as I have said countless times as traders we have a limited amount of mental capital and mine is spent on In Play equities that offer risk/reward of greater than 1:5.

I made two trades in the SPY Friday. One was a scratch and the other a decent size winner. The first trade was a long against SPY 135. This really was a “throwaway” trade. 135 wasn’t a major support level. It was just a whole number almost two points away from the prior day’s close and so I expected some type of buying against the level. It was a “B Trade” at best. I got long 135.03 and when it popped to 135.25 I sold 25% and placed a stop at 134.98. I was stopped out for basically a scratch on the trade.

The second trade was more solid. I got long against the June 29th gap low of 134.85. I was long from 134.87 and risking less than ten cents. This was closer to an A trade as a SPY gap low will be bought the vast majority of the time the first time it touches. But it is not an A trade for me as the multi-day uptrend was broken with the gap below 136.30. I sold partial into the move to 135.50 and got flat before the close in the 135.60s and realized a profit of greater than 5x my initial risk.

Steven Spencer is the co-founder of SMB Capital and SMB University and has traded professionally for 16 years. His email is [email protected].

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