Both of those things are connected. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Don here... Friday's 125-point rally made a lot of people feel safe. Markets ripped. Headlines turned bullish. It was not safe. The S&P 500 opened Monday almost exactly where it opened five weeks ago. All that violence. Zero net movement. Underneath the surface, five weeks of option open interest has been packing into the same strikes like dynamite in a mineshaft. If you are holding positions this week without understanding that setup, you need to watch this. In today's free session replay, you'll discover: - Why Friday's rally was short covering, not buying. The largest short book in history came into last week. When those shorts buy to exit, markets rip. But that buying is temporary. The upside from here is capped. The downside risk is significantly larger.
- The gamma snowball building inside a 100-point range. Five consecutive weeks of open interest rolling forward into the same strikes. Every week the market stays here, the snowball grows. When it breaks, the avalanche goes one direction fast.
- How one stock is masking what the rest of the market is doing. 80 products traded down Monday morning. The S&P was flat. Nvidia was up 3% carrying the whole index. Microsoft failed to bounce. The advance decline line tells a completely different story.
- What Wednesday's delayed jobs report means inside this setup. Non-farm payrolls got pushed by the government shutdown. That report now drops into the most concentrated gamma environment I have seen in years.
The upside is limited. The downside has no floor because there has been no persistent trade below 6800 in months. If that level breaks, the fall could be fast. I drew the levels on screen. This week, I am running coaching sessions on expected moves. If you want to understand how I measure risk in this environment, then you need to show up to the main room LIVE. Watch the full breakdown of why the biggest short squeeze in history did not change the trend, how gamma creates explosive risk, and what the market is hiding behind one stock's rally. To your success, Don Kaufman
Chief Market Strategist, TheoTRADE P.S. What if you had tomorrow's levels today? Blake Young puts out his Dark Wires key numbers across multiple markets every night BEFORE the next trading day. It's mathematical. It's logical. And used correctly, it can give you an edge. Wednesday at 2PM EST, he'll show you exactly how it all works. 👉 CLICK HERE TO REGISTER FOR WEDNESDAY'S WEBINAR →
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