S&P Edge (ES) Daily Trade Plan: Negative Gamma & The 4-Hour Loss
A detailed ES & VIX plan for Jan 8th, breaking down the 6974 resistance cluster, the 6942 barometer, and the “Favorite Buy” at 6880.50.
Scheduled News
Options Volatility Levels
Good morning everyone. Today is January 8th, it is Thursday.
Yesterday we had a glorious day with the trade plan as we nailed both the longs in sequence from the 6983.50 Daily to new All-Time Highs and then the pullback into 6978 long for another continuation. In the afternoon session, we also had the break below 6974 that has continued to pay all evening into the overnight session. Yesterday was easy money—congratulations to those who took advantage.
Our post-market breakdown is working out exactly as we talked about. We lost on the 4-Hour Timeframe, shifting momentum below our 6974 pivot, and the overnight sell-off has ensued, taking us down to essentially pause directly above our 6942 Daily.
A Note on Today’s Market:
News: 8:30 AM Unemployment Claims. Sure to give the market a shake.
Volume: Relative Volume is extremely elevated at 64%. Market participants are here to play; be aware of increased volatility.
Gamma: We are opening in Negative Gamma territory. Yesterday’s push lower flipped dealers from long to short (hedging for downside).
Range: Expected range is 51 points. We moved 34 overnight. Approx 20 points left, but with high RVol, we could add 50% to that (possible 30 points left above or below the overnight high / low).
🧠 Current Market Context
Yesterday, after poking All-Time Highs, we had a shift as the 4-Hour timeframe lost support at the end of the day. This leaves us with a substantial amount of overhead resistance and a potential downside lean. Dealers are scrambling with massive amounts of puts and calls (see GEX Chart).
