11/18 Volatility Zones: Gamma Squeeze, Chop, and Support LevelsWeekly GEX Levels for SPX:
The SPX analysis from last week’s free newsletter seems to have played out well. If you recall, based on the weekly GEX levels, there were no significant gamma levels below 5950. As soon as the price dropped below that, we saw the anticipated red gap-down to 5850 by Friday.
With Friday's move, SPX shifted from a positive NETGEX range to a negative one:
Let’s not forget: a negative gamma range means that market makers move in the same direction as retail traders, increasing the likelihood of stronger price movements, regardless of the market’s direction. Until the 5900 HVL level is reclaimed, I don’t expect this to change. As we saw today, there was a nice bounce off this level with a rejection, making it a tough resistance to break.
If it does manage to break through, there’s currently a call gamma wall at 5925. Clearing this level could open the door to higher ranges again.
While the week is still long, if the market fails to regain stability by Friday, breaking below the major 5850 PUT gamma wall could lead to another rapid move down, similar to last Friday, targeting the 5810–5800 range.
Gamma Squeeze Zones for SP:SPX & AMEX:SPY this week:
Above 5925:
Gamma squeeze zone, where upward momentum can accelerate.
Chop Zone:
Between 5900 and 5930: Sideways movement expected, with the market consolidating in this range.
High Volatility Zone:
Below 5900: High volatility zone, indicating increased intensity in market movements.
Market Makers Hedging Behavior Shift Zone:
Around 5900: A critical zone where market makers may adjust their hedging strategies.
Call Resistance:
Below 5940: Reduced volatility expected as call resistance limits upward movement.
Put Support Levels:
Around 5850: Highest negative NETGEX/PUT support level.
Between 5810 and 5800: Additional put support levels acting as key supports; if 5850 broken, turbulence is expected.
IV and Skew Data:
IVR: 16.9 increasing
IV Average: 14.9 increasing
PUT pricing skew: 31.5%
