BY BILL GRIFFO 

December 15, 2023

Morning Income Hunters,

Key Levels to Watch

Short Term SPX Resistance: 4,750

Short Term SPX Support: 4,700

SPX Risk Pivot Level: 4,700

Major SPX Range High/Resistance: 4,750

Major SPX Range Low/Support: 4,400

After a period of consolidation around 12/15 OPEX, we look for a final year end rally, with a downside break of 4,700 our interim “risk off” level.

January OPEX is setting up to be a major event, with a risk that expiring large long call positions could pull markets lower into mid-January.

SPX Futures are +.20% .. Key SG levels for the SPX are:

SPX Support: 4,700, 4,650

SPX Resistance: 4,750, 4,776, 4,800

1 Day Implied Range: 0.76%

QQQ resistance is at 405, with support at 400.

IWM resistance is at 200, with support at 189.

• Options values/IV’s continue at historic lows in the SPX offering traders cheap upside and downside exposure or hedges.
• Today we see ~30% of S&P 500/Nasdaq/Russel gamma expiring …
• The majority is at the 4,700-4,750 area for S&P (470-475 SPY), near the 400-405 strikes for QQQ, and 200 strikes for IWM. 
• The removal of this gamma with expiration should allow for index volatility to increase – which we are already seeing as the SPX 1-day implied move is the highest it has been since 11/27.

Below is the Gamma levels for our core watchlist

The strategy that we have discussed to be long IWM has worked great and it may be time to look to fade it if it breaches the newly rolled call wall up at 200 … 

The QQQ call wall actually rolled lower to 400 so will open above it presenting an opportunity to fade QQQ above 400 to play for mean reversion back to 400, which is QQQ’s largest strike.

Have a great day, a great weekend, and a very Merry Christmas!!

Live and Trade with Passion My Friends,

Bill Griffo