The Diagonal Spread That Reveals What Smart Money Expects by April

Don here...

Someone bought 70,000 SPY puts today while the S&P 500 was rallying. Brandon Chapman caught it in real time on Ghost Prints and broke down exactly what it means.

They sold 60,000 of the 575 puts in May and bought 70,000 of the 625 puts in April. A diagonal spread. Bearish positioning disguised inside a green tape.

Brandon and Mac Holbook spent this session dissecting why today's rally is a short covering event and how to use it as a pricing opportunity for downside trades.

In today's Live Trading Room session replay, you'll see:

How to use a rally day to price put spreads 40 to 50 cents cheaper. Brandon walked through SPY put spreads at the 30 delta, May 1st expiration. The rally shifted the 30 delta strike higher while keeping costs flat. You will learn how to move your strikes up without paying more.
Mac's exact SPX put spread entries and the anchored VWAP levels behind them. He entered the 6300/6280 spread at $3.65 and the 6220/6200 at $1.30 for April 10th. Both targets come from 2025 VWAP and fixed range volume profile. You will see the framework he uses to pick these strikes.
Why 0DTE skew was flat today and what that means for intraday vertical pricing. Brandon showed how the put side lost its normal vol advantage. When skew flattens, bearish verticals cost more. You will learn how to read the product depth curve before placing a trade.
The dispersion signal that tells you where money flows next. DSPX is rising while VIX is falling. Component volatility is pumping faster than the index. Brandon explained why this setup leads to Mag Seven concentration and VIX selling. You will understand how to use VIXEQ and DSPX together to anticipate rotation.

Mac shared his cyclical model outlook. He expects the downtrend to resume within the month and laid out exactly where the S&P 500 needs to close to confirm it.

Brandon showed how the quarter-end rebalancing from target-date funds could provide a short-lived bid. Stocks have underperformed bonds, forcing a shift. That mechanical buying may be what powered today's move.

→ Watch Brandon and Mac break down the 70,000-contract put trade, exact put spread entries, and why this rally is a setup for the next leg lower

To your success,

Don Kaufman
Chief Market Strategist, TheoTRADE

P.S. That diagonal spread Brandon flagged? 70,000 puts bought on a green day. Whoever placed it expects overnight repricing. My SUPERFLY strategy trades that exact phenomenon. Last Tuesday, I placed a TSLA setup live that would have turned $1K into $2,080 by the open. Tomorrow's alert is already loading.

👉 Watch the replay before it goes out →

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