S&P 500 Daily Trade Plan: Zero Participation & The 7737 Line in the Sand

A detailed ES & VIX plan for August 18th, breaking down the 7737.75 Daily above/below, the 7735 gamma flip repositioning, and the VIX 14.95 Monthly floor.

SCHEDULED NEWS

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🔗 Required Reading — The Weekend VIX Post. If you have not read the VIX article I published over the weekend, read it now. It laid out exactly what is unfolding right in front of us.

Good morning everyone. Today is Tuesday, August 18th, and we come off another insane day in the trade plan. We talked about the smack from the Daily leg down at 7822.50 in the post-market breakdown and in the Weekend Review, and that was followed up on Monday with a smack from the 7809 Daily that led us down all afternoon and through the evening session, making new lows underneath 7822 in an unprecedented move down. Based on our current view, that was six 1-Hour candles straight down with no rotations more than a ten-point pop here and there. It was quite a display of zero participation from buyers — first during the cash session, and then once again in the overnight session as we continued to move down.

Congratulations to all those who took advantage yesterday, because we really could have gone both directions. Many members in the plan took advantage of being underneath the 7809 and the 7799.50 and were able to ride the short all the way down into our target spot at 7775.50. Salute to every one of you who executed that.

As we come into the morning, we dipped below 7728 overnight to grab some liquidity, only to pop right back up and flirt with our 7737.75 Daily. That is the massive resistance we are bumping our head on right now — but it was also the huge support for us last Tuesday that propelled us to all-time highs. This will be a huge level for us to be above or below as we come into the day.

A Note on Today’s Market:

• News: No Red Tag news to speak of once again. My only concern is that we have zero Red Tag news to give us any type of market-moving volatility. We do have to assume geopolitical events remain on the horizon with Trump and others, so stay aware.

• Volume: Relative Volume is elevated after last night’s push down at over 73%. That is extremely increased, especially with no Red Tag news — very abnormal and something we need to keep an eye on. This could lead to one of two things: an oversized move, or relative volume flattening out as the market opens. Worth noting, by the close of this writing it had already dropped from 75% to 56%, meaning the players who showed up for the overnight push down are starting to dissipate.

• Range: Expected range of 54 points. We have already moved 54 points in the overnight session, meaning we have technically met our expected range and have no more room left today. However, with relative volume over 71%, we could actually still get a move of approximately 38 points above or below the overnight highs or lows.

• Gamma: Interesting turn of events this morning — the gamma flip level has moved to 7735, which is essentially our current price. This is the lower end of support for ES and is truly a dividing line. Underneath 7728 we were bearish and above 7728 we remained in balance; now with the gamma flip sitting at 7735, this is a massive level that options players will be hedging against, and it will truly determine whether we continue up or down.

• Trend: Downside lean intraday. We are still up on the Daily and Weekly, but we have lost the 4-Hour and 1-Hour time frames as of this morning. High time frames still point up, but the loss of the 4-Hour gives us the ability to pursue rotations in both directions.

🧠 Current Market Context

Zero Rotations, Zero Participation & The Gamma Flip Repositioning

ES made an insane move down yesterday from the highs and into the overnight session — something we warned everyone about in the Weekend Review and in the post-market breakdown. The move was really quite exponential, and it came with a complete lack of market participation. It doesn’t seem like there were any buyers available at all until after we swept the lows last night around 7720. Since then we have started to reclaim our lower area at 7731, reclaimed our weekly value low at 7728, and we are now flirting with the gamma flip level at 7735.