Enter. Analyze.
Understand.

SPY REGIME

Is the broader market in a tradeable trend?

Compares SPY's current price to its 20-day and 50-day moving averages. If SPY is below both MAs, market conditions are unfavorable for aggressive long setups. This single filter eliminates most losing trades taken against the trend.

VIX LEVEL

Is volatility too extreme to trade safely?

Reads the VIX fear index. Above 30 signals panic conditions where options premiums are inflated and directional moves are unreliable. The filter flags elevated VIX so you can size down or sit out.

SECTOR TREND

Is the sector supporting or fighting the setup?

Checks the relevant SPDR sector ETF (XLK, XLF, XLY, etc.) against its own 20-day MA. A stock trying to break out while its entire sector is declining has a significantly lower probability of follow-through.

MA20 / MA50 ALIGNMENT

Is price in a confirmed trend?

Requires price to be above MA20, and MA20 to be above MA50 for bullish setups (reversed for bearish). This three-layer check filters out stocks in choppy, sideways conditions where options strategies bleed value.

SUPPORT / RESISTANCE TOUCHES

Has this level been tested and respected?

Counts how many times price has bounced off a key level in the past 20 sessions. Levels tested 2+ times carry more technical significance. A first touch is speculation; a repeated bounce is evidence.

FALSE BREAKOUT CHECK

Did price actually commit to the move?

Measures where price closed within its daily range. A close in the bottom 30% of the day's range on a supposed breakout is a rejection signal — real breakouts close near the high of the range.

VOLUME (1.5× AVERAGE)

Are real buyers or sellers showing up?

Compares today's volume to the 20-day average. Moves on below-average volume are weak and often reverse. The 1.5× threshold filters out noise and requires meaningful participation before flagging a setup.

OBV CONFIRMATION

Is cumulative volume backing the price direction?

On-Balance Volume adds volume on up-days and subtracts it on down-days. When price rises but OBV falls, fewer real buyers are participating — a divergence that precedes reversals more often than not.

RELATIVE STRENGTH VS SPY

Is this stock outperforming the market?

Compares the stock's 10-day return to SPY's 10-day return. Stocks that are already outperforming their benchmark are more likely to continue leading. Lagging stocks rarely become leaders mid-move.

GAP %

Has the move already played out overnight?

Gaps larger than 2% at open often represent exhausted moves — traders who bought the news overnight. The filter rejects setups where the potential edge has already been priced in before the market opened.

CANDLE QUALITY

Does the most recent candle show conviction?

Analyzes the candle body-to-wick ratio. Long wicks relative to the body signal indecision or rejection. A quality candle closes in the direction of the intended trade with minimal upper shadow (for longs) or lower shadow (for shorts).

ATR STOP DISTANCE

Is the required stop loss actually manageable?

Calculates the Average True Range over 14 days and checks whether a 1.5× ATR stop would require risking more than your defined maximum per trade. If the stop is too wide for your account size, the setup is filtered out.

BREAK-EVEN RULE

Does this trade have room to be profitable?

Options have a break-even price that accounts for the premium paid. The filter checks whether the underlying has enough room to reach break-even before the stop is hit. Trades with unfavorable break-even ratios are flagged.

MARKET BREADTH

Is broader momentum helping or fighting this setup?

10-day price return identifies whether the stock is approaching overextension. Setups in stocks that have already moved 15%+ in 10 days carry significantly higher reversal risk — the filter catches these before you enter.