Nobody Realizes How Big This Is

[00:00:00]If you filter for over 1 million in premium on QQQ and the S&P 500, so you can see here on Cheddar Flow, you can see there's actually 80.8% worth of put flow just this week alone.

[00:00:12]It's only been 3 days and 19.2% call flow. So, very interesting that tables have turned, at least in terms of the flow. You can see all of this here.

[00:00:22]QQQ and SPY unusual put flow from early on in the week. Some of these being out the money at the 680 strike here on QQQ.

[00:00:30]As I scroll up, you can also see 1.6 million here, 1.8 million, 1.6 million, 1.3 million, etc., etc. Lots and lots of puts, many of which are actually highlighted here on the system because they are either very unusual or highly unusual, as are these blue ones. They're very short-dated as well as out the money, as you can see with this 1.2 million dollar opening order for the 720 strike on SPY that expires on July 28th.

[00:00:58]So, a lot of put activity like I just said. If we go over to the chart, you can see here the S&P 500 is in a very interesting spot. Mainly because, if I dissect this for you guys, you can see we've been range-bound for a long time.

[00:01:13]Range-bound since almost the start of May. All of this over here has been sideways price action with a couple attempts like over here to break out, over here, and more recently over here.

[00:01:23]But, every single time it attempted to break out decisively, it fell back below into this entire range, which I'd characterize as being below 750.05.

[00:01:33]And what's interesting about that is we fell back below yet again as of last week on Friday. And not only that, today we actually retested 750 in my pivot over here to the tick, and it rejected it. So, that's very interesting because that means bulls are unable to establish clear demand above the 750 level, which means there's been an inability to break out and hold that breakout for continuation above this range thereafter, which means it's very likely we have to go further down to retest the lower end of the range. Minor support over here at 737 and the main support being the 732 18 as you can see with all of these attempts to break below over here. What's really prevalent right now is that there's a lot of put flow like I showed you guys at the start of the video. Plus we're below the 750 level and we're not only below it, we're very close to the 750 level, which makes for good risk reward on a short setup. So in the case of this week, if I scroll in a bit on the hourly chart, because of this rejection here, it's still possible of course we have a bit of an overshoot and the market likes to do that. It likes to get people off sides and pretend that it's going to break out for example as we saw over here and then collapse back in as we saw more recently. So it's possible it does something like that again. Maybe it even wants to wick above 755, the highs over here. Wants to have a liquidity grab above intraday and then collapses back down. I'm not sure which one it chooses. However, I do know that as long as we reject around this range going forward, it is very likely we continue to 737 and even more likely below that that we go down back to 732 again, the lower end of the range, which means there's a beautiful risk reward up here, especially on a 750 retest like today and even more so on a overshoot intraday. If we were to go up to like 752 for example, I see that as being a nice short setup. Assuming of course it stays below ideally on the daily especially the weekly chart below the 750 level. So that's what I'm looking at going forward on SPY and QQQ looks exceptionally bearish, much worse than the S&P 500 mainly because it is below its pennant pattern. So you can see here as I spoke about in the Sunday video, we had a breakdown and then a retest over here, rejection off of the retest, actually double retest and the continuation lower. So as of now, it's in that bear territory and to be honest, I don't expect like a collapse in the market guys. This might be just a small pullback. Maybe we see it go a little bit lower than the recent lows were followed by consolidation and upside.

[00:03:57]I'm not sure, but what I do know is risk reward is ideal as of now for that short setup like I mentioned predominantly on the S&P 500. So going back to the flow, like I said, a lot of put flow hitting the tape mainly Monday and Tuesday.

[00:04:09]Today was actually very light all things considered only a couple unusual prints like this $1.6 million put for the 710 strike on the S&P 500. However, we go over here to gamma exposure. We're looking at about a billion worth of the 755 strike right now for that call wall, and then about 2 billion worth as a put wall at 740. So really we're just smack in the middle of both of these at the moment and until it's able to get back above again 750 and then if it's able to get below 740, we're really not going to see much of a trend. It's probably just going to trade like ping pong in between both of those strikes just cuz that's where a lot of that exposure is. Now going to some other things, if we look at dark pool of was here and by the way, you can get up to 20% off now just from watching these videos if you use the code you see at the bottom of your screen. All you do is click the link in the description, you'll get 7-day free trial of Cheddar Flow plus 20% off afterwards just from watching the middle of these videos. We don't give those discounts anywhere else, so it's kind of a thank you for watching these. You can do that now if you choose. Regardless, if we filter for just this week in terms of the dark pools on the S&P 500, the key a level so far has been around 743, specifically 743.27 and 743.92.

[00:05:25]You're looking at almost 3 billion worth of exposure there, which of course we are above at the moment. Just a light exposure below. Still though, if we go back, just go believe it was back in June, you just go back about a month, there was that giant 750 level which we have yet to reclaim of course, at least decisively.

[00:05:44]That is of course the 750.05 level.

[00:05:47]You're looking at 11 and 1/2 billion worth of premium. So, this is still the key bias point. Nice confluence with gamma at the 750 level, which just supports how critical this level is to the entire trade setup on the S&P 500.

[00:06:00]But, this is everything. Still need to see that decisive break above for bulls.

[00:06:04]Otherwise, it's going to continue to project like it did today and could see much lower off of that. So, wanted to of course bring that to your attention on the S&P and QQQ. Another thing I do want to bring to your attention is MU. So, Micron has seen a ridiculous amount of bullish activity, specifically yesterday and today. So, I'll actually bring you to historical flow to show you what was happening yesterday. But, basically, we had a lot of put sell orders. And by a lot, I'm talking like over 50 million worth of put sell orders. You could see for the 1,190 strike. Just millions upon millions worth. And these were sold to open. So, in this case here, it looks like they want to collect the premium.

[00:06:44]Also, the potential of a hedge just because they are decently in the money at the moment. But, what's really interesting about this is today there was nice follow-through of not only put sell orders, but call buy orders. Cuz you could see here, $20 million worth.

[00:06:58]This is opening cuz again, volume is over the existing open interest of only 256 on this one for the 800 strike. So, in the money of course, but a short dated expiration on that. 23.9 million here. Looks like a spread based on the split orders. However, just a lot of bullish activity that we've seen on Micron suddenly, which is of course good for not only the stock, but also semiconductors and as a byproduct likely could be for the market if they want to continue to climb. So, going over to the chart, you can see here there is a head and shoulder pattern. So, not a nice confluence with the technicals of course. Bullish flow started yesterday.

[00:07:32]This was on Tuesday and then we've only consolidated this far. So, everything really is contingent on this about a thousand to a thousand and twenty level.

[00:07:41]Mainly because of course, 1000 is going to act as a key resistance regardless, just cuz it has nice whole number to it, but it also acts as the first part of the shoulder line to this head and shoulder pattern that you see here on my chart. So, we need to get back above 1000 to 1020, like I said, in order for this to be negated. You could see it actually had a resistance around this area recently, just because of that's possible we push back up to it, but it really needs to get back above here in order for it to negate all of this here and continue much higher. So, as of now, expect this to act as a resistance, found support on the neckline of this head and shoulder pattern, so that's good at least for the short term for bulls, but it needs to get back above 1020 in order for this to have continuation, which is what I'm watching, cuz you guys know if I'm short-term bearish on the market, I of course don't want to see semiconductors break out of this head and shoulder pattern. I want it to hold for that continuation in the rest of the market and to be mindful of other products and other aspects to the market just because they all influence each other. It's an entire system overall, so I mean be mindful of this 1020, be mindful of the Micron flow, as well as, of course, be mindful of AMD here, which is attempting to break out of its consolidation that it's seen uh recently. All of this here is consolidation. Still more room for it to go. It needs to get back above roughly 580 for it to be considered a breakout again, but again, need to be mindful of this in the short term just cuz semiconductors did support the market quite a bit on its recent run-up in terms of momentum that had going into the summer. So, with that being said, one final thing I want to mention just because they had earnings today, uh Tesla here did have Tesla earnings. This is down to 362 now, so you could see here if I go and show you extended hours for after hours. Doesn't look too hot at the moment, although there still, of course, is that call later, so we'll see what Elon has to say about their earnings, but it is down decently in terms of this after hour price action.

[00:09:35]If I go to the daily chart over here, you can see it attempted to break out of two flags here, but once it broke down back below roughly 385, 386, below this flag, it was kind of over a fork regardless of earnings just because this is a breakdown of its structure. So, see what the rest of the earning season has to offer, of course, but not as good of a sign so far that Tesla is bearish, which of course can have an impact on the rest of the market potential downside from here. Regardless, like I mentioned earlier, everything right now is contingent on that 750 level up here.

[00:10:07]Just a beautiful confluence of a variety of different factors, whether it be gamma, whether it be just basic technical analysis, whether it be dark pool prints, this 750 level is critical.

[00:10:17]We have yet to see a decisive break above, only fake outs. As of now, it remains to be more bearish as long as we're below. We'll see if we have that overshoot anytime soon, but you do want to make sure that this is a decisive breakout if you want to flip to bullish, otherwise it's going to be at bare minimum, no pun intended, range bound between roughly 730 to 750. Anyways, as always, appreciate you guys watching this video. I'll see you next time.