S&P 500 Daily Trade Plan: The Squeeze That Accomplished Nothing & The 7485 Line in the Sand
A detailed ES & VIX plan for July 31st, breaking down the 7485.25 true above/below marker, the 7519.25 4-Hour close line that decides everything for the Bulls, and the VIX 16.64 Daily floor.
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OPTIONS VOLITILITY LEVELS
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Good morning everyone. Today is Friday, July 31st — and it is also the last day of the month. Yesterday we had a most incredible squeeze. After a 150-point selloff from FOMC, they ended up sweeping the lows, holding our SPX Daily leg at 7312.74 and the 4-Hour on ES at 7336.50, and were able to open back above the very significant Weekly at 7412.25 on ES. That led to a massive squeeze all day, catapulting us up almost 150 points and sending us all the way into our highest and most untested resistance that we were looking for earlier in the week.
This was the most incredible short squeeze we’ve seen in a long time — and we had it nailed. We were able to warn subscribers ahead of time based not only on the GEX skew, but on our History Says posts and on being above or below the significant areas where momentum shifts. We knew this squeeze was a potential, and we warned subscribers in the trade plan title and throughout the plan yesterday. Congratulations to all those who heeded the warning and were able to take advantage of that intense move up. We were also able to grab a sweet short off of the 7446.00 Daily/4-Hour that paid 45 points in the middle of a massive up move — a huge score for Team Beachy. Our subscribers put up insane points once again, even in a massive squeeze situation. Team Beachy conquers the markets.
As we come into the morning, we drifted up in the overnight session and were up 30 points, leading us all the way into our significant highest untested 4-Hour at 7519.25 — the massive 4-Hour we were looking to play last Tuesday — as well as the Daily leg down at 7507.75. Price has now gone up and flirted with both of our goals, which is the very important and significant area we need to get above and hold above if price is going to continue its upside move. We are at an extremely critical point right now, as the high of the Globex session is essentially the area the Bulls need to move higher than if they are going to continue their momentum. Or the Bears could take back over this morning and erase the entire up move from yesterday. It strictly depends on whether we can hold certain important Daily structure for support, or move above important Daily resistance for continuation higher.
A Note on Today’s Market:
News: No Red Tag news to speak of. However, we do have the Employment Cost Index at 8:30 a.m., and at 10:00 a.m. we have revised Consumer Sentiment and revised Inflation Expectations. Even though these are not Red Tag events, they are sure to cause some volatility as we find ourselves at the highs of yesterday’s insane squeeze — a squeeze that truly accomplished nothing in terms of our process.
Volume: Relative Volume is flat at -5%, meaning we could truly expect our full range to be met today.
Range: Total range of 106.5 points. We have moved 49.5 points so far, leaving us approximately 55 to 57 points above or below the overnight highs or lows. That is a fantastic range and gives us plenty of opportunity to make money today.
Gamma: We are currently still in Negative Gamma territory. Our gamma flip level is still at all-time highs at 7650.00, meaning dealers are still hedging to the downside and are still in a position to want to lean to the short side — giving us expanded volatility and increased ranges, meaning money can be made in both directions. I encourage caution here, as in my opinion we have just approached a major short spot.
Trend: Downside lean. Yesterday’s pop did not gain us the 4-Hour or the Daily time frame, which are the time frames we have in control. All signs still point down, and we are hitting a massive area of resistance. I am leaning to the downside for now until we get above 7519.25.
🧠 Current Market Context
A Squeeze That Gained Nothing & An End-of-Month Friday
Here is the honest read on where we sit. Price moved up yesterday in rapid fashion, squeezing all the shorts who were looking to the downside and making them pay. But we accomplished absolutely nothing. Price pushed all the way up into our highest untested 4-Hour that we were looking to get played on Tuesday. That level has now been played in the overnight session at 7519.25, and it has led us all the way back down to the Daily at 7485.25.
Please remember this: the 7519.25 above us is the 4-Hour we need to close above in order to regain support on the 4-Hour time frame. If price does not close above 7519.25 on the 4-Hour, we have still not gained on the 4-Hour and we are currently still pointing down. That is the whole ballgame for the Bulls today. Meanwhile, the 7485.25 Daily is our major momentum shift pivot — it was important on Wednesday, many times throughout last week, and on Tuesday as well. Above or below 7485.25 is going to be everything for us today, and we are going to monitor it with a vengeance.
Also be aware that it is the end of the month. This is a huge event. We tend to see a lot of funds and other large position holders shore up their profits toward the end of the month as they have to make good for their clients. The end of the month and Fridays both tend to be extremely volatile days. We need to be very careful, very patient, and wait for our setup.
