Tuesday’s Session was Cycle Day 3 (CD3): Early rally attempt failed at the 4641@spotgamma level. Sellers continued to pound price lower, settling into a range between 4560 – 4590, where 4596 was yet another key Gamma resistance. Market on Close (MOC) was a whopping $8 billion sell imbalance. Range was 111 handles on 2.705M contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Average decline objectives normally for CD1 are in-place, so price may revisit prior low (4556) for a surety test. NOTE: 4550 is a “key reference” level for many traders, including the “gamma-guys” Given the elevated volatility, upside still has potential so stay flexible and manage risk accordingly. As such, estimated scenarios to consider for today’s trading.