7/24 Gameplan
Good morning. You can find the link to my IV/MM composite charts here:
7/24 Market Gameplan
QQQ 0.00%↑
Overnight, we maintain a high-strength hedge prevalent regime amid a slight "discount" IV environment, with a lower implied range than we'd expect following TSLA/GOOG earnings releases. We have developed resistance at the option-implied pivot, with short continuation development pending as the New York session opens.
If the pivot centered at 565.5 can maintain as resistance (below 566), we anticipate the developing short trend will expand to our dangerously proximate IV wall support centered at 562.5. Should the 562 level break, we can quickly accelerate to the max fear/"cap attempt" zone, which must be vigorously defended to prevent an outsized positive exposure move from developing.
Our W7 daily vector remains intact at 560.44. Historically, this level has proven nearly impossible to break beneath in local history- but when bulls fail to defend it, it often produces strong intraday short acceleration and outlier positive exposure when conditions align precisely. If the resistive pivot can be broken, we can continue to the weekly ceiling at 567.5, or advance beyond to our IV wall zone for another cap attempt before positive exposure develops above the IV overflow.
Our upside cap zone carries the heaviest session inflection strength, though both zones should attempt to capture the high/low of day when encountered.
SPY 0.00%↑
Overnight, we maintain a hedge prevalent regime amid a discount IV environment. We are attempting to form a short trend below our option-implied pivot, currently inhibited from continuation due to weekly ceiling support. Market makers have purchased significant SPY stock in anticipation of delivery or due to passive delta-hedging requirements and will continue buying as price moves up and away from the weekly ceiling.
However, we can occasionally break the weekly ceiling support level, which can trigger an outsized reversion short as MMs rapidly sell back delta to hedge to neutral within their warehouse. Presently, we're taking vigorous support from the weekly ceiling support, which must be broken to accelerate any meaningful short move intraday on SPY or QQQ. If it fails to break as support, it will likely exhaust the QQQ short move in tandem.
If the 635 pivotal resistance can successfully break, we anticipate continuation to the overnight ceiling/upside IV wall with a high-probability cap within the zone. If the pivot holds as resistance, we expect either range-binding between the pivot and weekly ceiling, or if weekly ceiling support is lost, continuation deeper to the IV wall zone and potentially into the downside high-probability cap zone at the 630 strike (with major outlier acceleration below).
We maintain a hedge prevalent regime amid a discount IV environment. We are attempting to form a short extension beneath the overnight MM deadzone, with incremental support at the IV inner wall and IV wall zone that can attempt to exhaust the short move.
If the inner IV wall support breaks, we can continue into the 224 IV wall zone and potentially into the weekly PML at 223.0. Conversely, if pivot resistance is lost, we can travel toward the weekly ceiling and high-probability cap zone.
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