Every trader has done this. You see a

level, a big round number, prior

support. The stock's been getting

crushed all morning and finally we're

coming right into that level. It looks

like it's going to break. So you short

it.

And you get absolutely

destroyed.

That's not bad luck. That's not a random

stop hunt. That's a specific pattern.

And once you know its name, you'll never

fall for it again. It's called the

offside scalp. And on July 15th, SOXL

ran it to perfection, right into a key

level giving us a rubber band. So you're

going to learn two things here. All

right, so this stock dropped 33 points

from the open, right into 150, a major

round number, prior key support, right?

And right when it broke that level and

every short seller in the world was

ready to pile in, right when it was

right there, it snapped back $13. The

traders who shorted that break, who saw

that break coming, they were the fuel

for the entire move higher. Now, today

I'm going to show you the complete

framework for finding that trade before

it happens. Not after, but before. And

it comes down to four things. The

stretch, the wall, the offside scalp,

and then the snap, right? Once you

understand how to layer in an options

position on top of that entry, you'll

never look at the chart the same way

again. Let's go. I'm Jeff Holden, I'm

head of trader development at SMB

Capital. We've been developing traders

using this exact methodology for a long

time.

Because before I walk you through the

SOXL trade step by step,

I want to give you this three-part

framework.

Cuz once you have the names, once you

have the sequence, you can apply this to

any chart, any market,

any time frame. Stocks, options,

futures, forex, it doesn't matter. The

logic is the same because with this

combination and in this order,

participants are forced to act in a

certain way, so we just get to manage

our risk and we get to let the reward

take care of itself.

Now, this is the first component of this

idea. It's the stretch. The stretch is

what happens when price moves too far,

too fast in one direction.

You can see it on the chart, right? Big

candles, momentum, everybody piling in.

It looks obvious. It looks like it's

going to keep going lower forever. This

moment is where the amateurs trade,

right here at the point of maximum

extension. They're chasing the move

that's already happened. A trader on our

desk kept looking at the chart and

saying, "Today's the end of the SOXL

trade, right? Look at that selling. Wow,

it's never going to bounce. This is

going to go on and on. It's going to

It's a low of day close, right?"

And and they were right until they

weren't.

But then something really interesting

happened. That stretch really

really got going. It really started,

right? And we had that acceleration

early, but we didn't have enough time to

correct

through that. We had just enough time

for it to break lower, but that's not

enough time for it to really make an

unwindy move.

So, we are already stretched and then we

gave back a little bit of that rubber

band in that 11:00 a.m. to 12:00 p.m.,

that little bit of balance. We gave back

a little of that stretch, but then we

stretched it out even further.

That stretch tells you the rubber band's

being pulled. It doesn't tell you to

trade in the direction of the pull.

It just tells you to start watching for

when when and where the snapback might

happen. Component two is the wall. The

wall is the level that has the power to

stop the stretch and it's not just any

level. It's a level with memory.

A level the markets respected before and

a level that has meaning to other

participants.

On SOXL, $150 was not a random number.

It's not even just divisible by 10,

which is another key check for any

really important wall.

It was actually prior key support. It

was a major round number. It's bounced

there before and here's the part most

traders, especially the newer traders,

missed entirely. Maybe they didn't miss

it, right? Maybe they just didn't

believe it. Maybe they just didn't have

this exact lesson we're discussing right

now.

So, the leader in the sector on this

date had just reported strong earnings.

The market leader for all

semiconductors, which means the

underlying fundamental picture for this

sector, right? SOXL, all the

semiconductors, was actually pretty

strong even as the leveraged ETF was

getting destroyed intraday. When you

have a stretched move

into a key level

against a strong fundamental backdrop.

Now, this is a wall with real power

behind it. This is the wall where

snipers set up.

When we talk about a wall

sometimes it's a really discrete level

like $150, like the example we're

looking at today and we're going to go

through with a lot of granularity.

But so often a wall is really more like

a zone.

It's really a confluence of a couple

things.

You can use the same wall concept when

you're looking at where a 9 EMA crosses

VWAP and if that lines up with an

important level

from a price action perspective, let's

say $30, right? All of a sudden you have

this zone that is really, really

important. The more factors you can put

together

the more that wall, which is essentially

just a zone where there are a lot of

people that are forced to make a trading

decision

will really be significant. Even then,

when you have the wall, you don't pull

the trigger yet because you need the

snap, right?

Component three to all of this is the

snap. This is all talking about the

context of a rubber band trade, a trade

we teach in Scalp Radar with a ton of

depth. We actually have alerts for it in

Scalp Radar, and I think this one fired

on that and gave us exactly what we were

looking for. Now, the traders that we're

going to talk about in a second weren't

looking for that. They were just

believing this was going to keep getting

sold, right? Look at all the momentum.

We'll talk about why in a second as well

because we were on the desk and it was

really almost scary and amusing to hear

them talk about all of this stuff, but

let's zoom into the snap, what I saw,

what we saw,

what a lot of the experienced traders

were looking for at that moment because

the snap is the moment that the market

really shows its hand. It's not really a

feeling. It's not an instinct.

It's a specific price action signal that

tells you the sellers are exhausted and

that the buyers are stepping in.

But before the snap, there's usually one

more trick the market plays. And on this

SOXL trade, it was one of the cleanest

examples of it I've ever seen. Let's

look at the chart because right before

the reversal, SOXL had put in a little

bit of a consolidation right above 150,

right? And it looked like it was going

to break higher for a second.

And then it made a slightly lower low.

Not a big breakdown. It never actually

broke 150, but it was just a tick or two

below the prior low.

And it also happened to be right into

that 150, just enough to look like it

was confirmation of a new leg lower.

And that is the final trap. Every short

seller who had been watching that level

just got exactly what they were waiting

for.

The buyers had been flushed out after

chasing it higher. They were looking for

new momentum, fresh confirmation that

the breakdown was going to be real.

So, they add and they press harder.

They're now fully committed to this

short. You can even see it on the

1-minute.

How it holds and it tries to pop a

little bit as it's holding below the

range and then it gets sold again. And

then the sellers are pressing and

pressing and pressing.

Well, this entire component that we're

talking about creates something called

an offside scalp because that's exactly

what it does. It gets traders offsides,

leaning short

at the worst possible moment.

It's maximum short exposure. When we put

it in the context of everything, it's

maximum short exposure right before the

snap.

Now, the sellers think they might have

confirmation. They think they're in the

right trade and they're completely and

catastrophically wrong.

Now, there were some traders that

weren't involved in this at all on the

first leg lower

or the second leg lower

or the third leg lower, which by the

way, three legs lower is a maximally

important thing to pay attention to

because three sustained legs like we had

is another check in the favor of that

wall holding and then us getting a

chance to look for that snapback. There

were some traders that missed all that.

When others were in it.

The ones that were in it on the short

side were having really good days. The

ones that weren't in a lot of cases were

not. Now, let's imagine that you're in

the group that's not having a

particularly good day.

It's coming up on noon. You look at this

chart and you almost can't believe it.

It looks so easy. I could have shorted

here or I could have shorted here or I

could have shorted here.

It just went down so cleanly. It's so

obvious, right? That voice in your head

is screaming at you. How could you have

missed this? Look how far it went. Look

how easy it was. That voice triggers

a fight or flight response.

And unfortunately for you, your brain

chooses fight.

But it does it in a justifiable way, so

it doesn't feel so abrupt, right? You

settle on this idea. Okay, this is

really getting sold today. If I can just

catch a clean dollar move in this, at

least I'll have been in the trade and

I'll have something to show for it,

right? I won't feel like a total loser

here. Okay, let me just make this easy

trade.

When that initial attempt to bounce off

of the 150 area fails to rally and the

sellers step back in, you think, "Okay,

the sellers aren't done. This can

probably easily break 150 and maybe even

flush to 149, maybe 148, and I can catch

a good move fast."

It seems like the obvious trade at that

time, right? You're seeing all the

selling pressure. It tried to bounce and

it couldn't. I'm going to catch an easy

point. Now,

you're dead wrong.

And you're not paying attention to the

context. You're forcing action instead

of making a good trade. Those are two

totally different things.

Let's say you take that short. Let's say

you're with that group that's chasing to

the downside and say, "I only need to

make a point or two, and this looks like

an easy way to make a point or two."

Now, unfortunately, you're not only

stopped

but since your fight response was

triggered,

it forces you to stay involved on the

wrong side even more.

Right? Let's assume I was just going to

risk 50 cents and I was going to make a

quick dollar or maybe $2 on small size,

but I just lost 50 cents so quickly. So

now I need to get that back. This is

exactly how revenge trading, that

revenge trading that strikes fear in the

hearts of traders. That undisciplined,

wild decision-making that comes with

revenge trading. That loss of control

that it forces you to see things that

aren't there.

You see a short in the face of an

obvious long. You start listening and

you start talking. You start telling the

stock where it should fail and roll back

over instead of listening to the obvious

clues it's giving you.

And then you leave the desk questioning

everything all because you were just

trying to tape scalp a quick buck so you

would feel better about missing a big

opportunity. Now, if you've ever had

this or you've ever had something

similar happen like this, drop a comment

about it below.

Here's the true tell.

You're sitting there going, "I want to

make 100 bucks." and you lose 300 bucks

trying to do it.

I I just need to make $50. I need to be

involved or something and you lose way

too much. This is something that has

happened to me

and I'm sure it's something that has

happened to a lot of people. But, I want

you to put a comment in this video and I

want you to describe what happened to

you with as much detail as possible.

This is key.

Getting it out and then reading it again

out loud. So, writing it in the comment

section, then find your comment, and

then read it out loud. It's the best

strategy you can use to train your brain

that it's not okay to go into fight

mode.

So, pause the video right now and go

type in your experience into the

comments right now. Let's see how many

stories we can get and we can all learn

together how common this is when our

brain tricks us into fight mode.

Now, why sharing is important is because

making the mistakes is prioritizing

taking action over making good trades.

And the markets consistently reward

good, clean trading.

And they inconsistently reward and

actually punish

taking action.

So, let's look at the good trade that

does get offered out of this exact

situation. And let's look at it from the

lens of somebody who just forced that

short at the bottom.

Now,

if you're not that person, which none of

us are now, we all got it out in the

comments.

We're a different person now.

Let's talk about the checks we have in

our favor. Let's look at this chart in a

totally new lens.

There was a tremendous amount of

selling. There was acceleration, and

then a pause, and then acceleration, and

then a pause, and then more

acceleration.

It went all the way into a key

level, that wall.

So, we've had a wall.

We have a stretch.

It's one of the highest conviction

checks in favor of the long trade that

exists in technical analysis. The

sellers gave it everything they had.

And then they pushed right at that

bottom. They made it right to a new low.

But, what happened? Price immediately

rejected it, and it started to creep

right back up.

That tells you the sellers are done.

Now, this is the snap.

And sometimes snaps are violent right on

the snap, or a big order steps in, just

takes it, double bar break, right? It

breaks the high of the two prior two

bars. And sometimes that snap happens a

little more subtly. On this example, we

see that subtle snap. The buyers just

step in, and it's distinct, and it

sustains. Right? Here comes the exact

entry signal. Okay? That double bar

break to the upside. Two consecutive

bullish candles breaking above the

recent short-term high with volume

stepping in.

This is how these moves build on

themselves. As those traders cover over

and over and over again, or even worse,

they freeze and they just hold, they

become the fuel.

Because this little moment, that's the

snap. That's when you pull the trigger

for the mean reversion trade, the bounce

trade. This is when you have the rubber

band trade. Now, the stretch tells you

the rubber band's pulled. The wall tells

you where it might snap, but the snap

tells you when to enter.

Amateurs trade the stretch.

Snipers

trade the snap. Now, let me walk you

through the exact execution. Because the

entry signal's one thing, and that's a

huge part of this trade, but the trade

structure is what makes the sniper entry

rather just than just a lucky guess.

We're going to go through something we

call our asset

protocol. So, our allocation, our stop,

our entry, and our target. We've talked

a lot about the entry.

Let's really quickly start with the

allocation. Now, the allocation for this

isn't something drastic. It's not an A+

opportunity,

but given the dynamics we talked about,

it's a solid A.

So, let's start with that. Our

allocation for this trade is A.

Now, you might say that I want to risk A

risk,

but where?

Can I risk right against the low?

Well, yes, you can.

Because you have all the checks in your

favor that if this violates that low,

it's probably really going to flush.

And that's how we really get to those

stops is what's the probability that if

it breaks this level, it's going to

continue further?

We need to make sure that we're putting

our stops at a high probability

situational spot.

That means if it breaks this level, it's

likely to continue down much further.

That's why our stop is put there. We

don't put it at a random price. We don't

put it where our entry was just so we

don't lose money. No, we always put our

stop at a spot where it's a high

probability that if we are stopped out,

the trade is completely going to go the

other direction. The stop here is simply

2 cents below the session low.

The day low was 150. The stop goes at

149.98.

We can draw it right on the chart. We

know exactly where it is. Because if

SOXL goes back below the 150 after the

snap, the trade is completely wrong. The

wall didn't hold. We have to get out.

It's going to be a small loss, but we'll

move on. And here's the thing about that

stop. It's incredibly tight relative to

the potential move. The target for this,

the ultimate target for the rubber band,

is always VWAP, the volume weighted

average price. Which at this point in

the day was sitting up around 163 or

164, right?

You're risking maybe 50 cents or a

dollar to make $13.

That's not a two-to-one setup. That's

like a a 13-to-1 or 12-to-1 or even more

if the setup works.

This is exactly why we focus on this

sniper

entry.

Because when we have that double bar

break, we have our allocation of A. We

have our stop of the low of day. We have

our entry of the double bar break. And

we have a target all the way up there at

VWAP. This is the most important thing

you can do with any trade.

That asset protocol. Why is this that A

allocation? Three reasons. Extend move,

key level, strong earnings from the

sector leader.

When those three things align, you size

up. But you don't just hold and hope.

You have to have a plan before you

enter. As soon as the trade starts

working for you,

you can do one of two things.

The way a lot of us traded this

is the way we trade a lot of things.

We trade options

and we trade stock in the same move.

Some people can just trade it with

options and some people just trade it

with stock.

But this combination allows you to do a

couple different things. Now, I

understand what strike you're going to

buy. Well, I would buy the 165s. Why

would I buy the 165s? That's generally

right where my target is.

Okay?

That is going to be my trade that I'm

going to hold unless it stops me out.

I'm not going to manage that element of

the trade. I'm going to split my risk

for an A risk in half. So, half of my

risk is going to go to options and half

of it's going to go to equity. I'm going

to buy my options with the intent of

holding it all the way. But with my

equity, I'm going to treat it a little

differently. I'll over manage that and

I'm okay with that. The first exit of my

equity is going to be in a measured

move. So, I'm going to take my entry to

the low of the day to my stop

and I'm going to look for one measured

move of that. And I'm going to sell a

third of my shares at that price. And I

understand what you're saying, but Jeff,

why would you do that?

Listen, I've got my core position

that I'm holding all the way to VWAP.

I need to give myself a little bit of

room here. I know that about myself, so

I'm going to take a little bit off. But

I'm not going to take it off randomly

because the price spiked higher. No,

I'm going to use a methodical systematic

way of exiting

and this is what we can do for all

rubber bands, especially when you have

an offside scalp.

You can just sell a third up into a

measured move from your entry to the low

of the day.

You can always flip it upside down if

you're taking a short, too. The second

exit

can be selling another third at two to

one.

At that point, you've basically

guaranteed a break even trade or even

some profit. Even if it comes against

you, stops you out, you're guaranteed to

make money.

All the mental pressure is off.

The final third of the stock position,

of the equity position, you're just

going to hold to sell at VWAP. This is

your full target. And this is where the

trap shorts are going to be covering the

hardest, because that's where supply

comes back in.

We're going to hold

our equity, that last third of our

equity, and all of our options all the

way to VWAP. And that's the best thing.

You know your exit before you enter.

That's the sniper discipline.

The stock position manages the risk, and

the options position captures the full

move. That's the two-layer sniper entry.

Stock for precision, options for

leverage on conviction.

Let me bring it back to the framework,

because what happened in SOXS on July

15th isn't a one-time thing.

This setup appears constantly on stocks,

on ETFs, on futures, on any instrument

where price can get stretched and

trapped. Participants provide the fuel

for the reversals.

The setup's always just the same story,

it just has different characters.

The stretch

tells you the rubber band is being

pulled. You look for big, extended

moves, right? Multiple legs, thinning

candles, exhausted momentum, price

that's moved too far, too fast. That's

your signal to start paying attention,

not to trade,

but just to watch.

The wall tells you where it's going to

snap. Not every level qualifies. You

want prior support or resistance, round

numbers, levels with memory, and

whenever possible, a fundamental reason

why the move to that level is overdone.

Maybe earnings or sector strength. Now,

here's what most traders do wrong with a

framework like this.

They'll learn it,

and then they see it everywhere. Every

extended move becomes a stretch. Every

support level becomes a wall. Every

two-candle pattern becomes a snap.

That's not how this works.

Not every stretch deserves your

attention. Not every wall has enough

memory behind it. Not every snap has the

volume to confirm it. The framework is a

filter. It's not a trigger to trade

everything that looks like this pattern.

What made the SOXL trade an A setup was

the convergence.

Extended move, check.

Key level with prior support and a round

number, check. Strong fundamental

backdrop being ignored by the tape,

check. Mechanical entry signal with

volume, check. When all four of those

things lined up, that's when you size

up.

That's when you go A risk. That's when

you put the options on and then you look

to hold them to target. Most days you

won't find that and that's okay. The

sniper doesn't shoot at everything that

moves. The sniper waits for the shot

that can't miss.

Now, if you want to go deeper on how we

build these entries at SMB,

how we grade them, how we size them, how

we structure the options position on a

round a stock entirely, I've linked a

recent video we did where we detail

another trade, similar trade to this,

right? That's where this framework lives

in full. Every setup,

every rule,

every decision point.

Watch that next. I'll I'll see you

there.