🌅 Good Morning, Reader!

This is the only August 14th of 2024 we get, so let's make it a great one.

Here's what we will cover today:

1. SPX Prior Day Action (through $volm command)
2. Pre-Market SPX Full Complex Structure & 0DTE
3. Market Trend Model
4. GEX Ratio
5. Mag7 Stocks
6. Proprietary Scans

Time is money. Let's get into today's premarket prep.

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P.S. If you are new, please click on the link below for an overview of the our 3-step framework as well as definitions of key terms unique to GammaEdge.

GammaEdge Overview

✍️SPX 0DTE Recap (Prior Day)

Below is our $volm command, which displays the "centroid" of put and call volume for each 15 minute slice during yesterday's session.

What is important to observe intraday with this chart is the trend of the call and put centroids.

Paired with our Market Trend Model (below) intraday, it's powerful to see how both the call and put centroids moved throughout the session along with the MTM and spot price.

✍️Market Trend Model

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.

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

Market Sentiment

• Delta Condition: Read notes in screenshot above.
• Gamma Condition: Call Dominated (change from prior day)
• Net GEX: +22k vs. -50k in prior day. Bulls have come to play.

Transition Zones (TZ)

• GEX: 5355-5440 is the algo drawn zone. We can also see the significance of 5400-5405, which offers a natural transition between calls and puts (referring to 'net oi' column).
• DEX: Same comments as above.
• Drunken Sailor: Generally is N/A on the full timeframe.

Key Levels

• Upside: +GEX at 5500 | COI at 5500
• Downside: -GEX at 5300

Excerpt from our commentary within the discord:

The All-Expiries complex has shifted to a Call-Dominated GEX condition. This is bullish, at least as a starting, 1-day event. Now we need to see it continue.

As noted above, 5400 is a key line in the sand today. Below there, and sentiment shifts.

✍️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.

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

Market Sentiment

• Delta Condition: ITM Puts (Above Spot) | ITM Calls (Below Spot)
• Gamma Condition: Call Dominated (same from prior day)
• Net GEX: +13k vs. +2k in the prior day

Transition Zones (TZ)

• GEX: Due to the algo settings, the transition zone is drawn from 5435-5440. However, we can take the artistic approach like we did above and see that 5400-5405 is a natural transition zone as well, which offer confluence with the full complex.
• DEX: Same comments as above.
• Drunken Sailor: 5400-5460. Also note the air pocket between 5360-5385.

Key Levels

• Upside: +GEX at 5450 | COI at 5550
• Downside: -GEX at 5435

Stay alert to intraday level changes using:

1. Web App Dashboard
2. $em command ($em spxp)
3. $s command ($s spxp 0 0)
4. $netstat ($netstat spxp)

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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.

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. Then execute from there.

✍️GEX Ratio

Overview of GEX Ratio

The GEX Ratio is defined as cumulative call gamma divided by cumulative put gamma. This ratio provides a snapshot of market sentiment, with higher values indicating more bullish conditions and lower values suggesting more bearish conditions.

Gamma is most impactful when options are at-the-money (ATM) and closest to expiration. Therefore, this ratio offers an enhanced view compared to the traditional 'put/call ratio' by incorporating gamma, which gives more weight to near-term market positioning.

The visualizations presented below are time series of the GEX Ratio, providing a clear perspective on the sentiment trends over time.

SPX

SPY

QQQ

IWM

Market Structure Heatmap

✍️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.

NOTE: Only the full complex time slice has been provided.

$AAPL

$TSLA

$MSFT

$NVDA

$AMZN

$GOOGL

$META

$AMD

✍️GammaEdge Scan Results

As part of our daily routine, we like to look at our call and put dominated scans. In particular, we like to take if the growing and shrinking day over day, which provides valuable insights into the shifting of call and put speculations amongst the largest stocks in the market.

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

🎉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🤝

P.S. If you find this newsletter valuable, we'd appreciate you sharing it with a friend or colleague.

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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.

🎓Education

There are currently 2 courses within the GammaEdge ecosystem:

The GammaEdge Framework

This is our flagship educational course designed to significantly speed up the learning curve for new members.

There are currently 2 modules available, each described below:

1. Bachelor's Module: 4 Core lessons (with 2 mini-lessons) that teaches you the foundational concepts/principles at GammaEdge utilizing Options Structure Analysis. Specifically, you'll learn:
   1. The importance and how to analyze Market Sentiment
   2. How to Identify Market Trend/Momentum
   3. Evaluating Market Structure for key trading levels
2. Master's Module: 4 core lessons (with 3 mini-lessons) which cover all things stocks/ETFs related for multi-day to multi-week trading. Here's what you're set to learn:
   1. Developing a Robust Directional Thesis
   2. Finding High-Quality Trade Candidates
   3. Analyzing Candidates for Tradability/Actionability
   4. Creating a Winning Daily Routine

Here is a 2-minute video covering what you will learn about:

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This course is available in its entirety to our 'Gold + Web App' subscriber.

For those of you not quite ready to make that jump, you can review Lesson 1 (of both the Bachelor's and Master's Module) for FREE using the link below:

Take Me to Lesson 1!

PTrans2PGEX Email Course

GammaEdge's bread and butter strategy is called 'PTrans2PGEX' and is based off two of our core levels, which are (you guessed it!) PTrans and PGEX.

The beauty of this strategy is it's 100% mechanical and supported by rigorous backtesting. We also run this strategy live in the Discord with entries and exits posted, which members have access to.

To learn more about the strategy, including a FREE course, use the link below to access:

Teach Me The Strategy!