To The Moon

$SPDR S&P 500 ETF Trust(SPY)$ $S&P 500(.SPX)$  05Jan26 🇺🇸 | 06Jan26 🇳🇿

🧠 Session Structure and Gamma Control

As this session develops, I’m reading the $SPY gamma map as a classic pin-and-fade environment. $690 is the MVC, and the interval map shows persistent positive GEX above spot with negative gamma building below. As price presses into that magnet, dealer hedging flows suppress upside velocity, forcing chop, rotation, and mean reversion. This is not a momentum regime. This is a structure-driven tape where patience matters.

📊 Why $690 Acts as a Ceiling, Not a Launchpad

The asymmetry is critical. Positive gamma above spot dampens upside moves as dealers sell into strength. Negative gamma below accelerates downside once support cracks, forcing hedges to chase price lower. That creates unstable ranges, failed breakouts, and sharp intraday reversals. Until gamma meaningfully flips, upside continuation is structurally capped.

📉 Volatility Is the Missing Middle Step

For the larger pattern to complete, volatility has to expand. A head-and-shoulders structure into March or April fits both price and options positioning. That’s the phase where VIX rises, hedges get layered aggressively, and sentiment finally turns bearish. Historically, that’s the condition that clears excess leverage and resets the tape.

⚙️ Why Rising Multiples Keep Surviving Sell-Offs

$SPY P/E ratios have expanded across cycles because productivity keeps compounding. From post-WW2 industrialisation to the transistor, PCs, SaaS, and now AI, each technological wave compresses costs, expands margins, and accelerates growth. Technology doesn’t just add revenue, it collapses friction. That’s why even violent drawdowns keep resolving higher over time.

🎯 My $SPY / $SPX Roadmap

I’m expecting a roughly 20% drawdown into a March or April low, designed to break confidence through a visible topping structure. From there, I’m looking for a sharp reversal, followed by two contained ~5% drawdowns in the back half of the year as volatility normalises. Into year-end, my base case remains an ~18% full-year gain.

🧩 The Through-Line

Short-term gamma creates chop. Medium-term structure creates pain. Long-term productivity creates higher highs. When those three align, the best opportunities are formed.

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Trade like a boss! Happy trading ahead, Cheers, BC 📈🚀🍀🍀🍀

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