S&P 500 Daily Trade Plan: Coiled At All-Time Highs, Red Tag PPI, Three Buys
A detailed ES & VIX plan for Thursday, August 13th, breaking down the 7770.25 first buy, the 7749.75 naked POC reclaim, and the 7731.50 sweep zone.
SCHEDULED NEWS
OPTIONS VOLITILITY LEVELS
Morning everyone. Today is Thursday, August 13th, and before we get into anything else ……..
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Now into the morning. We have been drifting all night long in the same range we had yesterday, with ES and the indices essentially balancing at all-time highs after the massive push up from last Tuesday. We have not gone anywhere — yesterday’s range was limited to only 28 points, a 68% smaller range than normal. We are staying coiled tight at all-time highs, waiting for an event to break us out in one direction or the other. That event may well be at 8:30 this morning.
A Note on Today’s Market:
News: Red Tag news at 8:30 AM — Core PPI and month-over-month PPI, along with unemployment claims. These are going to be huge numbers. These inflationary prints reflect directly on businesses and give us a real read on where the economy is headed. Sitting at all-time highs with VIX extremely suppressed, we need to be on our P’s and Q’s.
Volume: Relative volume is an extremely low -52% coming into the morning, and by the final read -51.2%. This is the worst I have seen in a long time — this kind of number usually coincides with a bank holiday and the markets being off. I am not sure why participants have taken a hiatus this week, but they certainly have. Yesterday came in at -40%.
Range: Expected range is 58 points and we have moved 24.75 points in the overnight session, leaving roughly 33.25 points above or below the overnight high or low. But with relative volume this negative, the math points to a muted day. Even if the news causes relative volume to fluctuate and increase by 50%, we are realistically looking at somewhere between 15 to 18 points above or below the overnight high or low, and 25 points in a best case scenario. That is the math — it does not mean they cannot exponentially move this market and change things fast.
Gamma: Positive Gamma. Dealers are hedging their positions to the upside, which causes us to squeeze ever so slightly higher as price continues to balance. The gamma flip level is still at 7650, well over 130 points from where we sit, leaving us in bullish territory for quite some time.
Trend: Up on the 4-Hour, Daily, and 1-Hour. We continue to balance sideways while pushing higher and higher, and that keeps our default bias pointed to the upside.
🧠 Current Market Context
Summertime Balance At All-Time Highs — The Part Where Patience Pays
We are looking at limited support right now. If price does actually flush below our main supports, we could come down quite a distance before we would actually shift our bias from bullish to bearish. But this is typical all-time-high price action — we have pushed up, and now we are balancing at the highs and accepting value while we wait for the next catalyst. The ES is coiled tight and staying compressed inside these smaller ranges. Just like yesterday, when the range compressed all the way down to 25 points in the cash session and a little over 35 points across the full Globex and cash session combined. That is abnormally small given we have had ranges well over 75 to 100 points recently.
This is a stark contrast, and it is exactly what happens when you combine summertime trading, all-time-high balance, and a positive gamma regime. This is the part where patience pays. Forcing a trade here will do nothing but cost you money, and taking trades outside of process will make you second guess whether you are right. Be calm, stick to the plan, and stay patient. The process keeps us safe, the process keeps us structured, and we can rely on the process for our trades. No guessing — only structured process.
