SPX week of Jan 27th 2025

25 gen

The upcoming week could be a bit wild based on the recent gaps and the FOMC meeting. There are a few ranges from recent gaps up that are prime candidates to be filled on a retracement. Especially considering that the last time the FOMC spoke about rates, the index dropped over 3% in a single day. That move is pictured below, and it spans from the current level of 6100 to the top of the lowest gap at 5890. Compounding this is that the highest level of negative gamma exposure sitting directly below the highest gap. Since volatility could pick up if we breach that negative exposure level and there are 2 large gaps below we could see a significant move down. The flip side of this is earnings of course - some of the biggest players are expected to beat estimates this week. That combined with the multiple levels of high gamma exposure sitting above the current level might keep the index rising all week towards the 6200 level. A very inexpensive way to play both sides would be far out of the money inexpensive debit spreads expiring Friday 1/31 centered around the strikes of 6200 to the upside and 5980 or even 5900 to the downside. Of course I am literally brand new at trying to do this kind of analysis so I quite possibly am getting all of this wrong (although I feel like I am getting the jargon down pretty well ;)

25 gen

Trade attivo

I meant an inexpensive way for me personally to play both sides would be the cheap OTM debit spreads - definitely not advice. Also, Gamma exposure levels were taken from Barnhart.com free GEX chart.

27 gen

Trade chiuso: obiettivo raggiunto

I made some money on the drop to the bottom gap this morning!