SPX Trade Plan — January 7, 2026
The insatiable bid in high-beta stocks persists, with participation expanding across more sectors and themes. Yesterday, this broadening breadth helped the SPY gain 0.59% and the DJI climb 0.99%. Meanwhile, the “freedom rally” in RSP and IWM continued their outperformance, gaining 1.2% and 1.3% respectively, signaling robust market health and expansion.
This rally appears to be just heating up. If mega-cap tech—specifically the lagging Mag7—finds its footing, we will likely see SPY begin to deliver outperformance and a significant push toward the next major psychological milestone at 7000.
Remember, throughout December our thesis focused on consolidation; during the final week, we identified the potential for a breakout. Breakouts following extended periods of consolidation, such as the one seen in the S&P 500 from September through year-end, are typically significant in both direction and duration.
For today’s trading, we are looking for SPX to backtest lower and fill out volume in the 6920–6950 range. This would represent a light, healthy pullback to establish a higher base for the next leg up.
Long Plan The ideal long scenario involves a backtest and hold of established support levels.
GEX Profile
Execution Levels
Long Plan
- See full post on Substack
Short Plan
- Breakdown: A break below the gamma flip at 6940 targets 6932, 6926, and 6920. A further loss of 6918 targets 6914, 6910, 6900, and 6894.
- Flush: A breakdown below 6894 triggers a deeper push toward 6875, with intermediate levels at 6888, 6884, and 6881.