S&P 500 Daily Trade Plan: Ten Weeks of Coiled Energy & The No-Support Squeeze
A detailed ES & VIX plan for August 5th, breaking down the 7773.00 lone 1-Hour support, the 7622.00 - 7630.00 gamma flip block far below, and the VIX 17.44 Monthly ceiling.
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Good morning, everybody. Today is Wednesday, August 5th. Yesterday we came off another insane squeeze as price held our significant Daily level at 7628.00 — given not only in the post-market breakdown but also in the trade plan — as we accumulated above our gamma flip level at 7630.00.
The market makers and large position players forced the market up yesterday past all-time highs, propelling us to another record all-time high with an insane squeeze of over 140 points. What looked like a straight rocket ship into price discovery mode, we were able to call the major pivot point at 7630.00 / 7628.00 and provide our subscribers with enough context to know where they needed to take profits — and to know that we were looking only for longs and not to try to short this market. Congratulations to all those who took advantage of yesterday. It was an insane push, and if you were able to get on this, it led to intense profits. We saw many people in the Inner Circle ring the bell and cash in on yesterday’s exponential move.
As we come into the morning, we are still drifting at all-time highs and we are currently up 34 points at the time of this writing, meaning price continues to drift higher in the overnight session. The Bulls are not done squeezing.
A Note on Today’s Market:
News: No Red Tag news to speak of, but we do have ADP Non-Farm Payroll at 8:15 a.m., which is not a Red Tag event. We also have ISM Services PMI at 10:00 a.m., and President Trump speaks at 4:30 p.m. today. Even though it is not a Red Tag kind of day, we want to be cautious as we sit here and surf all-time highs with little to no support in price discovery mode.
Volume: Relative Volume is at -10%, meaning we could have a muted range today — possibly only around 100 points.
Range: Expected range of 112 points. We have had a very tight overnight session once again of 39 points, leaving us approximately 70 points left in the tank above or below the overnight highs or lows.
Gamma: We still have a Positive Gamma regime, as our gamma flip level has not changed from 7630.00 yesterday. This is the level that is truly important for us to continue our momentum to the upside — it is our highest level of support. Given that our gamma flip level sits there, it makes perfect sense, as this level is still very much untested and has an opportunity to get a reaction once again.
Trend: Up on all time frames — the Weekly, the Daily, the 4-Hour and the 1-Hour. We technically have no reason to be looking for shorts. None. This is a long-only game and everything is in buy-the-dip mode.
🧠 Current Market Context
Ten Weeks of Trapped Energy & A One-Sided Call Skew
We sat this week essentially in a massive accumulation zone of over ten weeks before the S&P finally broke out yesterday. This is a huge occasion, because we sat sideways for well over two months building volume and building strength. That breakout was a pure momentum example of what it looks like when energy is trapped and then let loose — an exponential move — and it should be respected, as we have had a massive amount of energy stored up over our back-and-forth movement over the past ten weeks. Even though this move seems exponential, it is certainly expected.
ES is extremely elevated. Since July 30th, we have now propelled ourselves well over 460 points to the upside in a matter of four days. This is an extremely ridiculous exponential move. Squeezes like this should not be taken lightly, and we have no reason to believe this can’t continue. However, I will throw one piece of information out there — and this is not for you to hang your hat on, it is just for terms of reference. We had a piece of data come out yesterday showing us that we have a high probability of a mean reversion trade today, in either direction. Right now we have no reason to believe we could not continue to move to the upside, but history tells us that exponential moves like this do tend to get faded at least temporarily, as support is extremely thin.
