S&P 500 Daily Trade Plan: The Bear Flag Breaks & The 7524 Midpoint Pivot
A detailed ES & VIX plan for July 17th, breaking down the 7524.25 midpoint pivot, the 7596.50 reactionary short, and the VIX 17.44/17.19 floor.
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Good morning everyone. Today is Friday, July 17th, and we come off an awesome day in the trade plan yesterday where the gamma flip level was our perfect high of the morning, and our bearish downside lean underneath our 7599.00 significant pivot led us lower all day — including right through the overnight session, leaving us down 67 points at the time of this writing. It was a phenomenal day for trade plan subscribers. It was not an easy day in terms of price action, but Team VICI once again weathered the storm, followed the plan, executed to perfection, and made money once again. Congratulations to all those who took advantage of yesterday’s setups that were provided for you pre-market.
As we come into the morning, we find ourselves down on the 4-Hour and 1-Hour timeframes. Yesterday’s close below 7573.25 on the Daily signaled extreme weakness. That was the major Daily leg we struggled for many days to get above, only to close below it — a sign of potential weakness and a potential move lower. We technically have not lost on the Daily timeframe yet, but we have started. Today’s close is going to be very important for understanding the context for more up or down heading into next week.
A Note on Today’s Market:
News: No Red Tag news events to speak of today. We do have mild scheduled news at 10:00 a.m. post-open — Preliminary Consumer Sentiment and Preliminary Inflation Expectations. This is not a Red Tag event, it is preliminary news, but we should certainly watch for it regardless as it is a scheduled event and can cause volatility. On top of that, we have a lot of Iran geopolitical headlines back in the market, and of course we have Trump on the microphone, which is always good for a shake.
Volume: Relative Volume is at +63% this morning. That means we can increase our potential move by approximately 47 points, giving us a total expected range of 122 points.
Range: Expected range of 75 points. We have already moved 84 points in the overnight session — exceeding our expectations for a move before the bell even rings. Adding relative volume for a total of 122 points and removing the 84 points already given, this leaves us approximately 38 points above or below the overnight highs or lows. That gives us plenty of room for a move today, as well as a massive overnight session that we could potentially retrace.
Gamma: The gamma flip level has now rolled down once again, from 7615.00 all the way down to 7565.00. Dealers are hedging to the downside, rolling their positions lower, and keeping price suppressed. This drives our thesis that we could continue to point more to the downside.
Trend: Downside lean. We have lost on the 1-Hour and the 4-Hour, and they are leading us lower. We have not technically lost on the Daily yet — more than likely we will lose it today, but we do not make assumptions. Right now we are still technically up on the Daily while the lower timeframes point us lower. Expect volatility and expect rotation in both directions.
🧠 Current Market Context
The Bear Flag Confirmation & The Cracks in the Bull Market
Yesterday I made the call on the Daily timeframe insinuating that it looked like we were building a giant bearish bear flag. That is exactly what happened. The indices were unable to gain the 7628.00 Daily or the 7626.00 4-Hour, which ultimately reduced any ability to stay above the 7599.00 significant pivot. That was our major pivot yesterday — simply being below it implied bearish weakness, and we saw exactly that play out through yesterday’s cash session and into the overnight.
We have started to move down both yesterday and overnight, and we are now well underneath our significant levels of support. We have started to accept value lower, which shows extreme weakness and puts us under some significant momentum shift levels that we worked extremely hard to get back over. This could be a significant sign of weakness and could ultimately send us lower underneath the July 8th low, where we then determine whether we can pick up new buyers to come back higher or not. Based on our true process, we are starting to see cracks in this bull market. With the loss on the 1-Hour and the 4-Hour, we could potentially see more downside, and today’s Daily close will be a huge indication of exactly whether we lose the Daily timeframe or not.
