Gamma (GEX) continues to show positive shifts, both in terms of total GEX and the potential for higher strikes. Given that we’ve had 2 days of rallying, we may see some retracement mid-week, but the current picture points to greater odds of eventual higher prices into Friday, with more concern looking beyond Friday.

SPX’s 4-hour Keltner bottom stopped the decline overnight, and we saw a nice rally in the cash session, albeit from a big gap down. It’s clear that volatility is back, but does that mean we’ll keep declining? Let’s look at how SPX closed today and identify what we’re watching for tomorrow.

Thursday we laid out a possible pathway that included an attempt beyond 6100 on SPX, and a possible retracement beginning the same day. This worked out extremely well, and the pullback is continuing in the futures market with a big gap down of over 100 points in SPX. Tonight we’ll look at some levels to watch as we enter the first trading week of February.

While overall gamma (GEX) remains neutral, we see growing interest at higher strikes, implying higher odds that we eventually reach those targets. We still have the Hull moving average to contend with short term, and a VIX that triggered a bullish volatility signal on the 2-hour chart. Pullback and then rip? The first month of 2025 ends tomorrow, so it may be an interesting day.

Today was relatively tame by FOMC standards, with markets slightly weaker most of the day. We see a bullish overall shift in SPX, but we also see undeniably large volume at two VIX strikes (30 and 60) that may cause bulls to at least consider an effective hedge. How do the two divergences make sense?

We saw a nice rebound today and (in some cases) yesterday, but we are at or approaching resistance heading into FOMC tomorrow and big tech earnings immediately after. Will more pain be delivered to late bears or are we ready for another leg lower?

Despite the gap down, the cash session longs won the day with one of the larger one-day gains in 2025 so far. Who would have guessed? We may not be out of the woods yet, but with the FOMC announcement and press conference Wednesday and big tech earnings largely starting that same evening, we may see a few surprises for everyone this week.

We’ve recently highlighted potentially bullish developments in markets as we see gamma growing at higher strikes, though we also said we expect a short-term pullback given the extended nature of indices. Looks like the dip is upon us. What levels are we looking for to validate/invalidate a potential opportunity?

“Straight to target” continues as all indices closed higher, despite pockets of weakness earlier. Similar to prior tops in recent history, QQQ is the late bloomer, outperforming over the last 2 days. QQQ has enough large components that are near lows to justify another day or so of upside. Let’s take a look at how we might end the week and what lies ahead.

VIX expiration is now behind us, with the 15 strike serving as the target at the time of the 8am ET completion. This opened up the pathway to new hedging, and thus a rising VIX even as QQQ and SPX barreled higher. IWM was less optimistic, so we’re starting to see more divergences that potentially justify at least a pullback in the near term.

indices gapped up over key Hull moving average resistance today, managing to hold most gains into the close while the VIX dropped to the key 15 area we’ve mentioned. Earnings are starting to heat up, with NFLX kicking off big tech, and we have VIX monthly option expiration in the morning. Let’s take a look at where we stand.

Gamma once again helped us to lean in the right direction last week for monthly option expirations, with SPX 6000 being an important draw into Friday’s close. Let’s look ahead at a shortened 4-day week which includes the important monthly VIX option expiration Wednesday and a pivotal area for broader indices as a new United States presidential regime signals potential major change for world markets.

Indices experienced a modest selloff today, unsurprisingly given the large move higher over the last 2-3 days. Importantly, indices are holding above key levels so far, maintaining the bias toward the long side. In our last newsletter until Sunday, let’s look at where GEX stands and we’ll look ahead at Friday and next week.

Most of today’s move was in the pre-market gap up, but with some technical resistance overcome, let’s reassess where we are and incorporate GEX into that picture. DIA vindicated our idea that it would lead the way higher, so the positive divergence worked this time around.

Indices tested important resistance today, with SPX and QQQ surpassing the Hull moving average intraday before retreating to close below the Hull and red for the day. Meanwhile, DIA diverged positively, closing above the Hull and near highs of the day. With CPI tomorrow and OpEx approaching Friday, we are at an interesting juncture and hopefully we’re at the doorstep of big opportunity at the middle of the first month of 2025.

DIA led the bounce Morning, which was identified as a logical possibility in our recent newsletters and YouTube videos. As we proceed through OpEx week, let’s look more closely at potential catalysts on the earnings and economic calendar, as well as a current look at GEX as of the end of today.

Friday ended the week on a negative note, with indices gapping down and sliding further while the VIX climbed. As we enter monthly option expiration week, and earnings are right around the corner, is this really the time to be doubling down on a short bias? Let’s take a look at what clues we see using GEX for the indices.

Volatility continued today, with indices struggling at different moments to erase the onset of more red. While concerning signals remain, we see the anticipated outperformance by DIA and the traditionally bullish OpEx week approaching as reasons to stay on our toes as we look toward the next and last trading day of the week on Friday.

Today gave us the answer to yesterday’s question of whether or not we’re out of the woods, but as we pointed out, these up and down moves are all within the context of the broader trend. While we have specific levels we’re watching to signal invalidation of the bull market, for now, we need to think tactically about what is next and what will trigger our next moves.

Today’s gap up annihilated bears counting on Friday’s gains to be reversed. This move fits in with our assessment of the odds favoring some sort of rebound from oversold conditions. But are we out of the woods? DIA and IWM might be signaling a weaker, temporary rebound, even if we do rally this week and next.