S&P 500 Daily Trade Plan: The Anticipated Pullback & The 7152 Weekly POC Battle
A detailed ES & VIX plan for April 28th, breaking down the 7152.00 previous weekly POC battleground, the 7164/7181 momentum reclaim levels, and the VIX 19.42 above/below pivot.
SCHEDULED NEWS
OPTIONS VOLITILITY LEVELS
Morning everyone. Today is Tuesday, April 28th, and we wake up to find ourselves in an interesting predicament. The indices have sold off 49 points from yesterday’s close, putting us right back in the middle of this massive two-week range. Price made an overnight all-time high and then proceeded to sell off 49.25 points at the time of this writing. We have come down into some major areas of support, however we have had an interesting turn of events: options market makers have flipped short and moved our Gamma flip level all the way up to 7235.00, leaving us in negative gamma territory.
This isn’t a surprise to us. Over the weekend, I put out a post regarding a potential two-to-four percent pullback before finding support and catapulting the ES back to all-time highs. Is this the start of the pullback, or simply profit taking into support to buy up today? We will soon find out. As we come down, we are already moving below significant areas of support and we are directly back in the middle of last week’s range, sitting at the point of control — an extremely important spot I pointed out in both the Weekend Review and some tweets yesterday, showing a clearly defined level of buyers and sellers.
A Note on Today’s Market:
News: No Red Tag news to speak of. We only have Consumer Confidence after the open at 10:00 AM Eastern. Even though this isn’t a Red Tag event, it is the only news event we have for both Monday and Tuesday — we cannot expect this to pass quietly. Be on the lookout and set your alarms for 10:00 AM EST.
Volume: Relative Volume has increased +24%. This increases our potential range for the day by close to 25%, expanding our total range to approximately 86 points in its entirety.
Range: Expected range of 69 points. We have currently moved 69 points in the overnight session — a full normal range already. With the +24% relative volume increase, total potential range expands to approximately 86 points, leaving us approximately 18 points above or below the overnight high or low for an expected remaining range. This is not set in stone but a good guide for the day.
Gamma: Negative Gamma — this is the major shift. Options market makers have rolled the Gamma flip level all the way up past our all-time highs to 7235.00, completely flipping the script from yesterday when it sat under our significant support at 7135.00. This is a clear indication dealers are hedging to the downside and expecting some sort of rotation. Look for increased volatility and a potentially expanded range. Money will be made in both directions, but this gives us an idea of a potential downside lean.
Trend: Mixed — challenging day. We are still currently up on all timeframes — we have not lost support on the Weekly, Daily, or four-hour as of this writing. This makes it extremely difficult to have a downside bias because all timeframes still point to the upside. However, our data shows we are looking for rotations, and the negative gamma regime adds further reason to exercise caution.
🧠 Current Market Context
The Anticipated Rotation & The Weekly POC Battle
ES comes into the morning now down 54 points at the time of this writing as they continue to sell this market off pre-market. This is certainly no surprise to us — we have been predicting this to happen since early weekend. Our data shows us that we are looking for a potential two-to-four percent pullback before coming down into support to make another leg up, so this move down has been of no surprise to Substack subscribers. In fact, this was something we have been waiting for.
We are now sitting directly at the previous weekly point of control at 7152.00 — this is the clearly defined level of buyers and sellers, and it is obviously clear where things go bad if we continue to push below the weekly POC. One of the important facts to note that makes today a little more challenging is that we are still currently up on all timeframes. This makes it extremely difficult to have a downside bias because all timeframes still point to the upside. However, we know based on our data that we are looking for rotations, and we are now in a negative gamma regime. This does not mean we will immediately pull back, but putting all the data together certainly gives us a reason to exercise caution and be safe.
