S&P 500 Daily Trade Plan: The Taco Trade & The 6857 Momentum Shift Pivot
A detailed ES & VIX plan for April 8th, breaking down the 6857.25 monthly/weekly momentum shift pivot, the 6787.75 daily support flip, and the VIX gap down below 20.78.
SCHEDULED NEWS
OPTIONS VOLITILITY LEVELS
Morning everyone. Today is Wednesday, April 8th, and we come off another insane day in the trade plan. We literally called the bottom at 6575.75 in the trade plan title yesterday, which held as the low of the day and ultimately ended up taking us up over a hundred points in the cash session — only to pop overnight another two hundred points, for a total of three hundred points from the exact low given in the trade plan title. All that in combination with the open short below 6633.25 made for an incredible day with trade plan subscribers. Awesome day, banked and in hand. Congratulations to all those who took advantage of the insane volatility yesterday.
Before we get into the plan, I want to sincerely apologize for the delay in getting today’s trade plan published. I am currently on vacation and ran into some setup issues with my travel PC that have now been corrected. I truly appreciate everyone’s patience and understanding — things should resume as normal from here. I will be on vacation through Sunday, but trade plans will continue to come out. Thank you all for sticking with me.
Now, as we come into the morning, we have the Taco Trade in full effect. We are currently up 172 points in the overnight session as President Trump has put a two-week halt on the Iran war, giving them two weeks to essentially come up with conditions for a ceasefire. The markets clearly loved this news — oil has dropped over 20% in the overnight session, the Nasdaq is up 3%, and the S&P is up 2%, all overnight. This is the Taco Trade in full effect — something very similar to what we saw last April with the Mexican tariffs, when Trump put a halt to the tariffs and that marked the bottom of our previous very short-lived bear market. It appears we may have experienced another one last night.
However, this leaves us in a very precarious position. We are looking extremely lofty up 175 points in the overnight session, well above our previous resistance — which is now support as they continue to accept value up here. We have completely moved outside of a multi-week range and have extended above four previous weeks, putting us in relatively new territory.
A Note on Today’s Market:
News: FOMC Meeting Minutes at 2:00 PM ET. This is not critical as we know exactly what the Fed is planning to do already, but set your alarm and be prepared for a shake — anything can happen. Geopolitical headlines surrounding the Iran ceasefire halt will continue to be the primary market driver.
Volume: Relative Volume is elevated at +43.2%, which is substantial. However, even with the increased volume, we are well into overdone territory on our range.
Range: Expected range of 123 points, but this has already been blown out of the water with a total range of 193 points so far. This leaves us in a precarious position for continuation or directional clarity.
Gamma: With VIX gapping significantly lower beneath the 20.78 Weekly, dealer hedging pressure to the downside has eased considerably. The massive overnight push higher reflects this shift in positioning, and as long as VIX stays suppressed, the environment favors continuation to the upside.
Trend: Upside momentum is clearly in control after the overnight gap, but technically we are still below our massive Monthly at 6857.25 and Weekly at 6859.00 — until we breach this area, we still have a downside lean from a structural perspective. The lean right now is to the upside given the momentum, but be cautious as this is a news-driven move.
🧠 Current Market Context
The Taco Trade — A News-Driven Breakout
We find ourselves in a very unique situation this morning. The overnight session has pushed us well above our previous multi-week range on the back of the Iran ceasefire headline, and we are now directly below our major above/below pivot — the Monthly at 6857.25 and the Weekly at 6859.00. If you recall, we were danger close to these areas five weeks ago, and now we have already pushed back into this spot on the back of this massive news event.
This Monthly/Weekly combo is extremely important for momentum shift above or below. As we have talked about for weeks, being below this area still leaves us considerably bearish. However, things have shifted slightly from a structure perspective — we are now very much well above our massive Daily leg down at 6787.75, which now being above this would technically act as support. The caution here is that we have gapped up well above it, and any geopolitical news event could potentially shake the tree at any moment. This is a political and news-driven headline, and these types of moves can be temporary — this is based on a two-week halt, and things can change very fast, which will change the markets very fast.
