S&P 500 Daily Trade Plan: The Fragile Highs & The 7543 Last Line in the Sand
A detailed ES & VIX plan for May 27th, breaking down the 7564.50 daily breakout for new all-time highs, the 7543.75 last-line-in-the-sand four-hour, and the VIX 17.48 above/below catalyst.
📧 IMPORTANT: Please Check Your Spam Folder!
A quick announcement to all subscribers — please check your spam/junk folder for emails from rbailey@vicitradingsolutions.com and info@vicitradingsolutions.com. I have been sending out follow-ups and touch-ups to all subscribers, including those who have subscribed to the SPX Brief, and I can clearly see many of these emails are getting stuck in the spam box and are not being opened. Please mark these emails as “Not Spam” so you continue to receive them in your inbox — there is valuable information I send out and I don’t want any of you to miss it.
🚀 Don’t Miss It: The Emergent Edge Webinar — TODAY at 1:00 PM!
Make sure you sign up for the Emergent Edge webinar taking place today at 1:00 PM. We are introducing the industry’s first institutional-grade backtester and releasing our almost sold-out first algorithm to the public. If there is any interest in having algorithms work in the background while you take care of your other business, then this is for you.
👉 Register here: https://pages.vicitradingsolutions.com/emergentedge
SCHEDULED NEWS
No Scheduled News
OPTIONS VOLITILITY LEVELS
Morning everyone. Today is Wednesday, May 27th, and we come off another beautiful example of how the Weekend Review paid massive dividends, as yesterday’s major Daily on SPX at 7501.24 held perfectly to the tick all afternoon, ultimately propelling price up well over 25 points by the end of the day. Given the extremely low relative volume, this was an immaculate trade yesterday for those who remained patient and stuck to the plan. Congratulations to all those who took advantage as money was made for those who were able to let the process play out.
As we come into the morning, we find ourselves elevated up 12.5 points in the overnight session as the ES continues to drift higher after sweeping the 7527.00 Daily level and reclaiming, only to come all the way up and test our highest Daily level that was created on Monday’s holiday price action, located at 7564.50. This has currently given us a smack and pulled us back into the overnight support that was made on the push up. We find ourselves in a very fragile state this morning.
A Note on Today’s Market:
News: No Red Tag news to speak of. We have a very small overnight range as well as extremely low relative volume coming into the day. Continue to monitor for any headline developments.
Volume: Relative Volume is extremely low at -34.6%. We need to be extremely careful today — with very low relative volume, price could potentially drift either way. When you have a low relative volume day, you do not want to fade trend, which is currently up.
Range: Expected range of 71 points. We have already moved 37 points in the overnight session, leaving us approximately 34 points in the tank above or below the overnight high or low.
Gamma: Interesting options skew this morning — we are tilted extremely heavy to the call side, meaning dealers are currently in Positive Gamma. However, there is a lot of open interest and gamma exposure on the call side, meaning dealers are still hedging to the upside, but a massive amount of calls have been sold to protect their downside. We need to be extremely careful today.
Trend: Pointed very much up on all timeframes — Weekly, Daily, four-hour, and one-hour. We have not lost support either way we look at it, and it continues to look like we want to be in price discovery mode. However, we have serious support levels directly below us that absolutely must hold if we are going to continue this progression higher. If they do not, we will continue to push lower and repair some of the inefficiencies in the market below us.
🧠 Current Market Context
The Fragile Highs & The Need for Support to Hold
ES has walked up all evening long and went up nearly to the all-time highs in the overnight session to test the support that was lost on Sunday/Monday’s Memorial Day holiday. Price found significant resistance at 7564.50 and has brought us down into the first major area of support at 7543.75. This is our major above/below level for today, as everything else below us is lower-timeframe and appears to be tested. We just tested the 7543.75 four-hour, and the truth is we have no true higher-timeframe support now to look for a test if we do in fact pull back. We could retest the 7540.00 / 7543.75 one-hour/four-hour area, but this would be our last line in the sand and a bit of a Hail Mary for price to hold and continue its push higher.
We created an all-time high once again in the Globex session moments ago, which gave us another upside target to gun for. All-time highs made in Globex sessions become upside targets for the bulls during cash sessions and generally get cleaned up sooner rather than later — though that does not mean it has to get cleaned up today. Right now, all things look pointed to the upside, including small suppression on VIX on this last push up. I warn you to be very cautious: we have no reason for price to retrace given our process, however we have truly tested everything on this up move. A down move in this situation could happen extremely fast because there is truly no high-timeframe support to keep us propped up. We also have data stating that we have a possibility within the next five days of having a rotation — we don’t know exactly when, so we just need to stay on point and be prepared for anything.
