S&P 500 Daily Trade Plan: No Man’s Land & The 7746 Sweep-and-Reclaim
A detailed ES & VIX plan for August 6th, breaking down the 7746.00 sweep-and-reclaim — the only long I have today — the 7770.00 point of control breakout above, and the VIX 16.20 midpoint pivot.
SCHEDULED NEWS
OPTIONS VOLITILITY LEVELS
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Good morning everyone. Today is Thursday, August 6th. Yesterday the trade plan played out exactly as we figured, where we assumed price would stay within range. We were able to short the all-time high at the open after price got underneath the overnight high, the open, and the previous all-time high — which provided for a beautiful short that paid well over 60 points, as Team Vici in the Inner Circle was able to understand what was happening and take advantage of that downside push. However, we knew the downside push was muted, as we are up on all time frames, and so we were able to take advantage of the little action we had.
Congratulations to all those who rang the bell and got on the scoreboard, because price action at the all-time highs is always difficult, and we need to take action when a trade shows up. After we have exponential moves to the upside, price tends to need to digest. A professional trade plan and understanding exactly what to expect keeps your trades within the possibilities of reason. So congratulations to all those who have been following along and took advantage of yesterday’s single move down.
Coming into this morning, we had one small push down of approximately 60 points from tip to tip — the only move we had last night. Now we sit sideways in an extremely tight range of only 22.75 points, and as we know, when this happens we are more than likely sure to catch a significant move today in one way or the other.
A Note on Today’s Market:
News: No Red Tag news to speak of. We only have Unemployment Claims at 8:30 a.m. pre-market, which is not a Red Tag event. We certainly want to keep our eyes on it as it will more than likely cause a shake — however, being pre-market, it should not affect our regular trading hours.
Volume: We come into the morning with an extremely muted Relative Volume of -38%, which cuts our remaining range down considerably. At the time of this writing it sits at -37%, and as we know from the past, that usually tends to lead to an extremely slow, grindy day with limited movement.
Range: Expected range of 98.75 points. We have already moved 22.75 points in the overnight session, leaving us approximately 76 points left above or below the overnight highs or lows — but after taking the relative volume adjustment into account, that leaves us an expected range today of only about 47 points above or below the overnight highs or lows. With no Red Tag news, that is a very plausible expectation as we sit at the highs digesting this massive move up.
Gamma: Our gamma flip spot is at 7630.00, putting us firmly in Positive Gamma territory. What that means is we could have a slow, grindy upside day today, which seems logical as we have continued to hold this massive push up over the past three days. Note also that being in positive gamma is partially responsible for our deep negative relative volume and will limit the potential for moves today, especially given no Red Tag news.
Trend: Up on all time frames — the Daily, the Weekly, and the 4-Hour. The only thing showing slight weakness right now is the 1-Hour time frame; however, that is not a controlling time frame and is not a concern of ours at this point. We are looking at the bigger picture and are still in buy-the-dip mode.
🧠 Current Market Context
Coiled Tight in an Illiquid Pocket
We need to take advantage of whatever the market gives us this morning and try to pull out one or two trades, as trades today will be extremely limited given our current location and lack of both support and resistance.
Looking at SPX, we find ourselves in a very peculiar situation, because we have very limited support below us. On the massive move up from Tuesday we created no support on the move up, making this extremely illiquid, and we could potentially push through it with speed. We know we are up on all time frames and this market is extremely bullish, so we have to be careful — because technically speaking, there is no support to play from yesterday’s close at 7723.00 all the way down into the Daily at 7609.78. That leaves essentially an open-air pocket where price could drift extremely fast straight down. More than likely that will not happen, but we don’t know exactly where we will find support, so we need to be careful. The way I am looking at this right now: everything is a buy-the-dip moment, and we have an opportunity much lower where we have some serious support we could play. But in between yesterday’s close and that, we do not know where a turn could happen, if at all.
