🌅 Good Morning, Reader!

This is the only July 5nd of 2024 we get, so let's make it a great one.

Here's what we will cover today:

1. Pre-Market $SPX 0DTE & Full Complex Structure
2. Market Structure Heatmaps
3. Market Trend Model
4. Proprietary Scans
5. Mag7 Stocks

Time is money. Let's get into today's pre-market prep.

P.S. If you are new, please skip to the last section below for any overview of the GammaEdge 3-step framework and well as definitions of key terms unique to GammaEdge.

✍️SPX 0DTE Levels (Today)

PSA: We don't care if you are a day trader, swing trader, or position trader. Every trade begins as a day trade. You cannot willy-nilly enter the SPX with the hope that the trade will work; you need to understand the broad structure and enter when the conditions are favorable for the direction of your thesis (or lack of direction if you think we're stalled).

If you do not understand the structure when you open a trade, you have no edge as to whether the trade will work in your favor or against you.

🔄GEX Transition Zone: 5515/5520*

♻️DEX Transition Zone: 5515/5520*

⛵️Drunken Sailor Zone: 5505/5540 w/ secondary zone at 5460/5500

📈Upside Levels: 5565 (+GEX) & 5565 (COI)*

📉Downside Levels:: 5510 (-GEX)*

*Stay alert to intraday level changes using: 1. WebApp 2. $em command ($em spx) 3. $s command ($s spx 0 0) 4. $netstat spx

💡Other Notes

• Gamma Condition: Call Dominated (same from prior day)

• Delta Condition: Above Spot Price: OTM Calls | Below Spot Price: ITM Calls

• Be cognizant of price in relation to transition zone. Are we above or below? Create your If/Then scenarios. As an example, if price moves through [x], then what? If price rejects [x], then what? You should have your game plan documented before the market opens! For there, you just need to execute.

Excerpt from our commentary within the discord:

We note that above the white line and within upper white box, there is limited PutOI. Due to this, the closing of puts alone (due to fear) will not be enough to push us above 5555.

We will need to see upside speculation via opening of OTM calls, to drive us up to 5565 and beyond.

We will be watching our VOLM and VOLD commands for evidence of this speculation.

Always remember that after we move through significant gamma, we risk the potential of unwinding gamma at a faster rate as time advances.

Remember to create your IF/Then Statements!

GammaEdge's full commentary & analysis is provided in the discord

✍️SPX Full Complex (Today)

Below is the $SPXP output for the full PM settlement. The purpose of this view isn't a focus on trading -- it's to get an overall view of the SPX PM structure, which is the most liquid, most speculated structure in the market.

Market Sentiment

• Gamma Condition: Call Dominated (same from prior day)

• Delta Condition: Above Spot Price: OTM Calls | Below Spot Price: ITM Calls

Transition Zones (TZ)

• GEX: 5515/5520

• DEX: 5515/5520

• Drunken Sailor: n/a outside the 0DTE expiration

Key Levels

• +GEX at 5550 and COI at 5550 | -GEX at 5505

Putting It All Together

Excerpt from our commentary within the discord:

COI represents the uninformed market point of concentration of calls (i.e., greeks are not taken into account given we are looking at all expirations here).

We do not believe that this is directly actionable but it suggests that if we push above 5550, we will see more fear/greed from those holders and the risk of monetization increases.

We also note that as the point of dominant convexity (since it's coincident with COI/ +GEX), we'll likely be in a "grind upward" due to charm, if we do not see monetization.

Lastly, note the confluence of the 5515/5520 transition zone between the full complex and 0DTE complex. This is certainly a key zone of reference today.

Remember to create your IF/Then Statements!

GammaEdge's full commentary & analysis is provided in the discord

✍️Market Trend Model

GammaEdge's full commentary & analysis is provided in the discord

✍️GammaEdge Scan Results

NOTE: For the sake of completeness and performing a consistent routine, we are providing both call and put dominated scans. However, we are not representing to go long or short any of these.

CallDomDel: Returns stocks that are call dominated below and above spot price, which are signatures of bullish structures.

PutDomDel: Returns stocks that are put dominated below and above spot price, which are signatures of bearish structures.

Other Scans Offered

1. Zero2Ptrans: Returns stocks that closed above ZeroGex but below PTrans.
2. Ptrans2PGex: Returns stocks that closed above PTrans but below +GEX.
3. We offer 17 custom scans in total

✍️Mag7 Single Stock Review

As we did with SPX above, walk through the 3-step framework for each of the stocks. Identify (i) key transition zones, (ii) key levels of reference, and (iii) gamma/dela conditions (sentiment). Feel free to email us with any questions as you perform your own self-analysis.

$AAPL

$TSLA

$MSFT

$NVDA

$AMZN

$GOOGL

$META

🎓Education

We just revamped member onboarding with our new flagship educational course called The GammaEdge Framework.

The main feedback from our beta testers has been this:

This course will significantly speed up the learning curve for new members, where you’ll learn all about (i) how we view the markets and (ii) how to use our tool in an ACTIONABLE manner.

Here is a 3-minute video covering what you will learn about, which revolves around our 3 pillars:

1. Market Sentiment: Discover how to identify who is winning the battle between call and put speculators above and below the spot price.
2. Market Trend: Understand market momentum—whether it’s moving higher, lower, or sideways—using our Market Trend Model.
3. Market Structure: Learn to identify key structural levels derived from the options market structure to use in your trading plan.

​

You can review lesson 1 for free using the link below:

🐦Twitter/X Threads

Below are threads on twitter/x we have recently published

​
​07/04/24:

GammaEdge @GammaEdges Ever noticed sharp pullbacks when trading $SPX #0DTE after moving through large gamma strikes (e.g., +GEX)? Curious why this happens? Here are our thoughts! 👇 11:15 AM • Jul 4, 2024 5 Retweets 23 Likes Read 3 replies

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🎉Thanks for Reading!

If you have feedback for us on ways to make our newsletter more valuable for you each morning, please let us know! Reply to this email with your thoughts.

Best of luck out there today.

GE Team🤝

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DISCLAIMER: This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

🚨GammaEdge Intro (For New Folks!)

Framework

At GammaEdge, we simplify the options markets for you. We do this through our 3-step framework which focuses on market trend, sentiment, and structure.

Below is the cliff notes version of that framework, which can be applied to any underlying (e.g., SPX or AAPL) and any expiration (e.g., 0DTE).

1) Identify Trend: Is price trend of the general market higher, lower, or choppy? Are we see breadth expand or deteriorate? How about significant buying and selling?

2) Identify Sentiment: Are call (bullish) or put (bearish) speculators in control of the options structure above and below spot price?

3) Identify Structure: Where are the key levels in the options structure where we see a shift to bullish control (through PTrans) or bearish control (through NTrans)? Or is spot price in between transition levels (i.e., an area of minimal dealer influence)?

What are the major strikes being targeted by call and put speculators? Along with the PTrans and NTrans, these levels have multiple uses including ranges for the day and trade entries/exits.

Bonus: Identify Other Relevant Changes: Has there been shifts in key levels or the transition zones day over day? Have call or put speculators started to dominate the complex to a greater degree? Understanding the changes that are occurring under the hood and where those changes are occurring is just as important as the current market structure itself.

Terminology

1. +GEX: largest call-dominated/positive gamma exposure strike in the entire option complex.
2. -GEX: largest put-dominated/positive gamma exposure strike in the entire option complex.
3. COI: strike price with the largest call open interest in the entire option complex.
4. POI: strike price with the largest put open interest in the entire option complex.
5. PTrans: top of the GEX transition zone where this strike and all others above have net positive gamma (call dominated) for the entire option complex.​
6. NTrans: bottom of the GEX transition zone where this strike and all others below have net negative gamma (put dominated) for the entire option complex.​
7. DEX/GEX Transition Zone: Area between PTrans and NTrans (DEX TZ can sometimes extended beyond PTrans and NTrans). We expect choppy price action within this zone. This is a low-exposure area regarding gamma and delta change. Dealers feel minimal pressure inside this zone, and we believe that market transactions OFF THE 0DTE drive price behavior if we are in this area.
8. Drunken Sailor Zone: Zone where market volume intraday overwhelms the structure, as opposed to GEX/DEX zones, which are derived from the structure itself.