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Good morning, everyone. Today is Friday, August 21st. Yesterday was an unbelievable, spectacular display of amazingness, where we played our Daily at 7714.25 for the first short in the morning, only to be followed up perfectly by a touch of our gamma flip level in the 1-Hour that was highlighted as the main reaction spot for the day. It ended up being the high of the day, sending the indices down well over 75 points from that level — only for us to turn around and catch the 7704.25 4-Hour for the continuation lower, sending price down another 45 points.
It was a fantastic day in the trade plan, as we essentially caught the high, the middle, and the low, literally to the tick, as they went all the way lower and cleaned up the excess in the profile from two Tuesdays ago on August 4th — exactly what we had been targeting since last week. Congratulations to all those who took advantage of this. As we know in the inner circle room, we all took this trade together as a group and all profited while having a very relaxed day. I look forward to delivering another banger to you today.
A Note on Today’s Market:
News: No Red Tag news to speak of. However, we do have President Trump speaking at 7:00 p.m. this evening. Coming into the morning, this sets up as a relatively muted day.
Volume: We have a Relative Volume increase this morning of positive 18.7%. That extends our usable room to approximately 37 points above or below the overnight highs or lows.
Range: Expected range of 59.5 points. Our total range so far is 38.25 points, leaving us approximately 31 points left in the tank above or below the overnight highs or lows before adjusting for volume.
Gamma: We have had a gamma flip shift once again, and dealers are now hedging to the long side. The gamma flip level is now positioned at 7660, directly in between the overnight low and yesterday’s low. This is a very interesting place for it, and it tells us dealers are hedging back to the upside, insinuating that a bottom could potentially be in — at least temporarily, and at least for today. As we all know, positive gamma regimes tend to reduce volatility and expansion, meaning we could have a reduced amount of range today. We need to be calm and patient.
Trend: Downside lean. We are currently pointed down on all time frames, as the Daily, 4-Hour, and 1-Hour are still very much pointed to the downside. Dealer positioning points us to the upside, or at least is hedging to the upside — but our process has not changed.
🧠 Current Market Context
Down on Everything, But Dealers Have Flipped
We cleaned up all the inefficiencies from the August 4th Tuesday — two Tuesdays ago — literally holding the inefficiency at the excess in the overnight session and pushing us up well over 33 points at the time of this writing. That is a significant piece of work completed, and it changes the character of what sits below us.
We also had an interesting History Says post come out yesterday at 8:00 p.m., insinuating that today could potentially be another upside day, or at least so history has proven previously. Obviously, as we know, this is not set in stone, but it is a good indication of what is possible to come — especially as we come into the morning up 33 points with the gamma flip shift below us.
