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Let's get something straight here. |
I spent the entire weekend talking about one thing: 6835 on the SPX. That was the level. That was where things would get interesting if we broke through it. |
And you know what happened this morning when all hell broke loose with the Greenland nonsense? |
We hit 6835 (6833.29 to be exact). Bounced right off it. |
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This marketplace is incredibly efficient, even when everyone thinks it's going crazy. |
Look, I get it. The futures opened down huge. Trump's talking tariffs. Everyone's an expert on Danish territory all of a sudden. The VIX spiked to 20.69. |
But here's what actually happened: The entire week's expected move - $82 - occurred in one minute. |
We dropped right to the lower edge of where the market was supposed to trade, and that's exactly where we found support. |
This isn't Greenland. This isn't about tariffs. This is about levels. |
I've been discussing these SPX levels ad nauseum. |
Just watch my video from Friday (I've got reciepts). |
Two weekend videos in a row dedicated to looking at the S&Ps and getting a feel for where that volatility box is. |
The expected move for this four-day trading week was $82. We closed Friday at 6940. That puts the lower expected move at 6858. |
What's the difference between 6858 and where we actually traded? About three points. |
After all the overnight drama, there you are - right on the lower edge of the expected move. |
Now, I know people want to talk about all the different reasons why. There's tariffs, there's this, there's that. Look, there's a lot of crap going on. |
But may I ask you a brief question? |
If it's going to be trade war related, why should we give a damn about tech? Why are we beating up Nvidia because they're buying H100s in Europe? Absolutely not. |
The marketplace sees what I see. |
We're not sitting here freaking out. Why should the market freak out? It's sitting where it was expected to. |
When you go out there and say you're supposed to have about an $82 expected move, and literally in the first minute we hit it, we slip below it - don't get me wrong, we're in a dangerous position - but we're basically trading right on it because it's the lower edge of the expected move. |
And quite frankly, it means more than anything else on the screen. |
But I know - it's Greenland, it's tariffs, it's taco time with Trump. |
Block out all that crap because that's the kind of crap you're just wasting your time on. |
You're wasting your time, you're wasting your energy. |
Look at the lower edge of the expected move. |
If there's a rally today, we're gonna rally right above it. We're gonna come up here, do a little dance, make a little love, and sit on the expected move tonight. |
Now, here's where things get interesting. |
I said if we break through 6835, all hell will break loose. That's when you'll see the VIX wake up and say "Huh, what? I'm waking up." |
We break overnight lows at 6846, then the VIX is gonna explode. But until then, we're stuck between a rock and a hard place. |
The volume told the story perfectly. |
When we broke through 6835, the volume surged. You're doing about 15,000 contracts in two minutes on the futures. |
That surge is literally us pushing off the lower edge of the expected move. |
So what does this teach you? |
When markets are moving like this - less attention to what you think, more attention to the order flow. Don't get caught up in the minute-to-minute news cycle. |
"US Supreme Court does not rule on Trump's tariffs today. Yay, we rallied." That's the kind of headlines I'm talking about when I say don't get caught up in any of this crap. |
The fact of the matter is simple: |
You're literally on the lower edge of the expected move. There's nothing more to say. |
If we break a little bit higher, I've given you levels for that. You break a little lower, I've given you levels for exactly that. |
But sit tight and let this thing develop. |
For those trading zero DTE today, heads up: |
There's still 25% implied vol for the remainder of the day. That's the equivalency of a $35 move in the SPX. So there's still quite a bit of volatility packed in. |
This is not as intense as people thought it was gonna be. Everybody just calm down. You're on the lower edge of the expected move. |
The marketplace is efficient. Even when it looks like chaos. |
That expected move framework I've been talking about? It works. The levels I called over the weekend? They held. |
While everyone else is becoming a Greenland expert, stick to what actually matters: levels, volume, and where the market is supposed to trade. |
Because in the end, that's what drives price action. Not 34 troops and a dog protecting an island nobody wants to visit anyway. |
To your success, |
Don Kaufman |
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What drives your trading decisions more? |
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