S&P 500 Daily Trade Plan: Negative Gamma Flip & The 7164 Make-or-Break Level
A detailed ES & VIX plan for April 22nd, breaking down the 7164.00 make-it-or-break-it four-hour, the 7180.00 gamma flip line, and the VIX 18.97 midpoint tiebreaker.
SCHEDULED NEWS
No Red Tag News
OPTIONS VOLITILITY LEVELS
Morning everyone. Today is Wednesday, April 22nd, and we come off an insane day in the trade plan where we essentially called the high with our highest untested four-hour at 7181.00. During the cash session, we were able to slip below our massive above/below pivot at 7161.50, which led to a 100-point down move yesterday — cleaning up a lot of the inefficiencies in our profile, exactly as the plan laid out. Congratulations to all those who took advantage. I know serious money was made yesterday based on the amazing notes and responses I got from subscribers.
As we come into the day, we are coming off more insane geopolitical news yesterday as we have another halt on the ceasefire — apparently this has been extended once again, which caused some end-of-day market volatility. The market has slowly ground higher this morning, leaving us up approximately 42 points at the time of this writing. We are creeping directly in the middle of our weekly value once again, putting us right smack in the middle of a three-day range. Our edge here is extremely limited based on where we are — we find our edge in the edges.
A Note on Today’s Market:
News: No Red Tag news to speak of today. We have no news events this morning. However, that does not mean we should be complacent — there is always a Trump tweet around the corner or war news we should be aware of. Stay cautious.
Volume: Standard participation environment coming off yesterday’s volatility. With the gamma flip and negative positioning, expect potentially elevated volatility even without scheduled news.
Range: Expected range of 75 points. We have moved approximately 26 points in the overnight session, leaving approximately 50 points above or below the overnight high or low for today’s expected range.
Gamma: Major shift — gamma has flipped Negative this morning as dealers are positioning to the short side. Our Gamma flip level sits all the way up close to all-time highs at 7180.00, which gives us a small downside lean and could bring volatility into today’s session. This was an interesting turn of events as I did not expect to see the Gamma flip level completely move above us.
Trend: Still pointed up. We have not truly lost on the four-hour or Daily timeframes as we have continued to push higher. We had a massive smack yesterday, but price is retracing that move this morning. However, with dealer positioning into negative gamma, this is an interesting change of events that warrants caution.
🧠 Current Market Context
The Negative Gamma Flip & Retrace Into Yesterday’s Smack Zone
We had an unusual change of events this morning as dealers have shifted us into negative gamma territory, moving our Gamma flip line all the way up to 7180.00. This gives us essentially a downside lean this morning from an options market-making position — however, we are still traversing to the upside. Yesterday’s fall of over 100 points from the overnight high essentially held the lows and rebounded us back up, and we once again have our major level here as we are essentially retracing the move down from yesterday.
We still continue to move up. We have not truly lost on the four-hour or Daily timeframes. The massive smack yesterday combined with the dealer positioning into negative gamma makes for an interesting setup. We need to keep a very close eye on the 7161.00 area — this is what was important yesterday. The untested four-hour at 7164.00 will be the make-it-or-break-it for today. We either hold this level and push higher, or we smack here and continue to reverse lower. In my opinion, this level is everything. If we smack from up here, that will be the last chance before coming all the way down to potentially 7069.50.
