S&P 500 Daily Trade Plan: Coiled Beneath 7737 & The Gamma Flip Squeeze
A detailed ES & VIX plan for August 19th, breaking down the 7737.75 line in the sand, the 7720 gamma flip resistance, and the VIX 16.15 midpoint pivot.
SCHEDULED NEWS
OPTIONS VOLITILITY LEVELS
📬 IMPORTANT — Check Your Spam Folder! To make sure you never miss a morning trade plan, please whitelist rbailey@vicitradingsolutions.com and info@vicitradingsolutions.com in your email client. Drag any VICI email out of Spam and into your Primary inbox so these land where they belong every single morning.
📈 Get the SPX Morning Brief — Free. Delivered to your inbox at 5:40 a.m. EST every trading day. Sign up here:
Good morning, everybody. Today is Wednesday, August 19th, and we come off another awesome day of the trade plan where we called the high of the day being the Daily leg at 7737. It was a major line in the sand and it acted as just that — playing us the high of the day and sending us down into new lows. Not only in the cash session, but all the way through the overnight session, as price pushed well over 40 points from our short, making for an awesome day for trade plan subscribers. Congratulations to all those who took advantage of this slow but amazing price action. The process played true and patience was indeed the key.
As we come into the morning, we sit coiled in an extremely tight overnight range of just 23.75 points, pinned underneath yesterday’s massive structure. Today will certainly be an interesting day to determine if the Bulls can reclaim that significant line in the sand, or if we will continue to push lower after Monday’s slide to the lows and Tuesday’s short testing our 7737.
A Note on Today’s Market:
News: No Red Tag news this morning. However, we do have FOMC Minutes at 2:00 p.m., which is actually Red Tag news — though I don’t think we’re going to find out any new information we don’t already know, so I am not overly concerned. Then at 2:30 p.m., President Trump speaks, which will more than likely cause more volatility. Be prepared for that time frame.
Volume: Relative Volume has increased this morning by 27%. That takes our usable room from roughly 26.75 points and expands it to approximately 34 points above or below the overnight highs or lows.
Range: Expected range of 50.5 points. We have only moved 23.75 points in the overnight session — an extremely muted, tight range — leaving us approximately 26.75 points in the tank above or below the overnight highs or lows before adjusting for volume.
Gamma: We are in Negative Gamma territory. The gamma flip level has shifted down once again and now sits directly above us at 7720, with current price right around 7719. This is acting as our major line of resistance as we speak this morning, and dealers are technically hedging at this exact spot. It will be very important coming into play for our day today.
Trend: Downside lean. Yesterday we had a major shift in our support structure as the Daily closed below 7737, cementing a loss on the Daily time frame along with a 4-Hour and 1-Hour loss. We are pointed down on everything but the Weekly, which gives us the ability to play rotation in both directions.
🧠 Current Market Context
Coiled Under the Line in the Sand in Negative Gamma
We stay coiled underneath yesterday’s massive structure in a 23.75 point overnight range. After Monday’s slide to the lows and Tuesday’s short testing our 7737, this certainly leaves us in a vulnerable state here for potentially more downside. With the gamma flip level currently directly above us at 7720, this also puts an excessive amount of pressure behind our downside lean.
However, I want to be balanced here. We do have history that leans hard to the bullish side, and given the fact that we are still not too far from all-time highs and we have already swept the lows, a reversal is certainly a possibility. We need to be very cautious that the Bulls are still very much present, and yesterday’s sweep of the lows could have brought in exactly the liquidity we need to play today. Our current process still points us to the downside, but anything is possible. We will use our significant pivots to understand what we are above or below.
