SPX Trade Plan — January 21, 2026
Since December, I have maintained a staunchly bullish rhetoric. However, as noted in yesterday’s morning note, the tone has shifted. While headlines focus on trade war tariffs, the real structural risk is the Japanese 10-Year yield and the unraveling of the Yen Carry Trade.
This liquidity drain is why we flagged caution on Crypto before the extended sell-off yesterday. When the cost of capital spikes in Japan, risk assets are the first to be liquidated to cover the spread.
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Structural Headwinds:
There are currently more headwinds than tailwinds. While “buying the dip” has worked for months, it is prudent to wait for a daily close above 6855 to repair the structure and turn off the CTA selling machine.
The Lines in the Sand For Bulls:
We aren’t cooked yet. Two major structural levels loom below:
It is entirely possible—and favorable—if we see a technical bounce off this zone if the flush deepens. I remain cautiously optimistic. I see the warning signs, but based on other signals, I don’t think it’s over yet.
The Catalyst: VIX Expiration (VIXPO)
Today is VIX expiration. The board shows a massive Net Gamma Pin at 20.
GEX Profile
Execution Levels
Long Plan
- Reclaim: We need a clean reclaim of 6800 to target 6810 and 6826.
- Continuation: A move through 6835 targets 6845 and the crucial 6852 (CTA Pivot).
- Extension: Clearing 6860 (The Flip) sets up 6875, 6881, and 6894.
Short Plan
- Breakdown: A rejection at or loss of 6800 targets 6792, 6775, and 6764.
- The Flush: A break below 6764 targets 6750. If we lose 6742 (100-Day SMA zone), look for a flush to 6726, 6721, and the 6709 structural floor.