$SPX $Q

The conclusion section of my smart money report from this morning 👇
Right now, more than core macro data or ERs, what’s at the wheel of the market is the mechanical necessities of the options market. When a negative gamma floor dominates on the dealer/market maker side, the market’s natural shock absorbers weaken; hedging works more procyclically. In other words, the reflex of selling on the way down and buying on the way up triggers more easily. That makes it harder to hold the range, enlarges the wicks, and makes the move not irrational, but mechanical.
The weight of 0DTE sharpens this regime even more. A market that opens down in the morning suddenly flipping positive by noon, or getting caught in an algorithmic waterfall sell into the close, is no longer an exception it’s a plausible scenario on this floor. Price can react more to the rhythm of hedge flow than to news; so moves can be pushed to extremes.
The critical risk is here: if leader blocks like tech break key supports, the probability increases that trend following algos and systematic players like CTAs step in. At that point, the sell wave can gain speed not from headlines but from positioning and mechanical de risking. The negative gamma floor also makes that acceleration more visible.
In a regime like this, the priority is not profit it’s protecting capital. So I can summarize the deadly mistakes to avoid like this:
Don’t blindly buy the dip: you don’t catch a falling knife, especially when the index direction hasn’t been confirmed.
Don’t fight the algos and the trend: rowing against the current hoping for a bounce can get expensive on this floor.
Don’t use high leverage and tight stops: in a negative gamma environment, price can easily violate logical support/resistance and then come back. Tight stops systematically knock you out in this noise.
Don’t fall into FOMO: short covering is often not the start of a new bull, but a mechanical correction inside a downtrend. Don’t open a big position without confirmation.
In summary, right now is not attack; it’s defense and observation time. Waiting for big players to complete positioning and for the map to clear is rational.
What do I expect in this process? The market can swing between two modes:
Holding the range: in volume driven positive gamma moments, a more range like tape that dampens the move
Acceleration on a break: with OI negative gamma active, a tape where the brake comes late, wicks get bigger, momentum hardens
What should we not do? In this regime, two mistakes are expensive: adding risk thinking the bounce is “relief,” and closing positions uncontrollably thinking the first sell shock is “panic.” Because the signals we have are saying this: institutions are at the wheel, but they’re not stepping on the gas. That means a controlled but fragile phase that leaves the market neither in free fall nor in a free rally. In this phase, discipline is more valuable than returns.