SCHEDULED NEWS: NO NEWS BANK HOLIDAY = VETERAN’S DAY
OPTIONS VOLITILITY LEVELS
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Morning everyone. Today is Wednesday, November 11th, and it is Veterans Day. To all of the veterans who defended this country — we appreciate your service, and we owe you a great debt of gratitude. Thank you.
Yesterday in the trade plan, we had an epic day as we called the 7599.00 ceiling. It played absolutely perfectly — not only on Monday’s high, but also in Tuesday’s overnight session — only to get smacked once again to perfection off the CPI inflation number, sending us directly down 100 points into our big major buy spot at 7507.75, the only spot I told everyone to be aware of for profit taking. It played flawlessly and paid 75 points on the rebound, just to get smacked once again for the continuation all the way back down to our 7490.00 Weekly. A lot of money was made yesterday, so congratulations to all those who took advantage of this spectacular trade plan, as it was laid out perfectly for us after the massive squeeze on Monday.
As we come into the morning, we find ourselves up almost 70 points at the time of this writing after an unbelievable squeeze in the overnight session. Keep in mind that today is a bank holiday — the bond market is closed, the banks are closed, and there will be a lack of institutional players out today. The stock market is open, but with so many of the institutional players on holiday, this could be a difficult time to trade, and we may see some interesting price action — just like this massive overnight squeeze.
A Note on Today’s Market:
News: There is no Red Tag news today — no news whatsoever other than geopolitical news. It is Veterans Day: the bond market and banks are closed, and the stock market is open with limited institutional participation. The only people trading today are mostly retail, since the big players are off work. Understand who the market participants are and when the best times to trade will be.
Volume: Relative Volume is -28.3% due to the lack of participation and zero Red Tag news. Taking 30% off our remaining range of 108 points gives us approximately a 75-point move left in the tank today. This lines up with our expected options read, as our options platform tells us we could potentially expect 72 points in today’s cash session. All of this lines up appropriately, so put this in your tool belt.
Range: Expected range of 176.25 points. We’ve already moved 68.25 points in the overnight session, leaving us approximately 108 points left in today’s range — or roughly 75 points after adjusting for relative volume.
Gamma: We are in Negative Gamma today, as our gamma flip level sits above us at 7646.00, aligned with a beautiful Put Wall at 7645.00. Dealers are still currently hedging to the downside — and that downside hedging also gives us increased volatility and massive ranges as they continue to try to push price lower.
Trend: Down. Regardless of the fact that we have squeezed up exponentially, we are still down on the Weekly, Daily, and 4-Hour timeframes. I can make a case for gaining on the 1-Hour, but ultimately our higher timeframes are still pointed to the downside, meaning we can expect rotations in both directions today.
🧠 Current Market Context
The Holiday Short Squeeze & The Leg Retrace
What we have seen over the past week, and many times before, is a short squeeze. This is when too many players are pointed in the wrong direction and ultimately get caught offsides, having to get out of their trades. That gives us an artificial market, as price continues to drift higher in an unorganized and inefficient manner.
We are up 62 points at the time of this writing, and we have pushed extremely hard in the overnight session to put us well above our 7599.00 spot that we were so focused on yesterday. This was quite a feat, and quite frankly it doesn’t surprise us that they did it in the overnight session. When we have a serious level that the market struggles to get above or below, we tend to make the move in the overnight session, when there is little to no liquidity to allow the push to happen. Coming into this bank holiday, the overnight session was a perfect storm for the overnight pajama traders — the Asian session and the London session — to push this market higher.
