Good Afternoon,

I usually hold these letters on Monday’s to see how we open up and how the market looks. Today, a press conference by our president was being held so I decided to wait and analyze the state of the market for you all one we made it through that event. In this news driven market, I want to get you good info. That’s why this is coming to you later in the day.

Today, even though the market is green, we are seeing much heavier put flow as opposed to call flow. I am preparing for a short term bearish move based on this information. The market popped at open and has faded throughout most of the day. The bearish flow keeps coming through which is indicating to me that dealers aren’t trusting this upward move and that we may need to be prepared for more volatility ahead. I have seen the same sentiment in the shifting gamma maps that I’ve been watching today which I will highlight below.

What we show is that price is currently in a positive gamma environment, but is hanging onto that by a thread. Losing the 656 range would likely lead to a quick sell off through negative gamma. With $650 being the largest pocket right now, I could see that being the target. I don’t look for that to happen today, but that’s what I’ve got on watch for tomorrow.

I’ve also watched them walk the largest nodes down today. Positive gamma was stacked heaviest at 660 to start the day but that has since been lowered to 657 as i type this. They are walking resistance levels down. One thing I am watching for that hasn’t really started yet is the rapid build up of negative gamma below current prices. While it is sizable, there has been no rapid increase in these sizes yet today. They’ve bounced around a bit but have mostly been range bound around current levels. Seeing volume build on the negative gamma pockets below is often a sign that markets are about to move in that direction.

I’ve got no official position as of yet. It’s looking more and more like a no trade day for me. If we breach 655 i could take a SMALL put position overnight into tomorrow. I really don’t love overnight positions at the moment on SPY simply due to the volatile nature of the news cycles. Those are out of my control and something I can’t forecast with my trades. So if you keep anything overnight, just keep it small.

Hopefully we can get some more directional guidance and find a solid trade tomorrow.

Let’s finish with our popular segment “Whale Watching” and show you some of the most significant Wall Street Whale purchashes of the day.

I will have more of today’s significant flow in tomorrow morning’s newsletter!

See you then!

-Caleb