SPY Slammed After Tariff Shock! Dealer Gamma Trap Accelerates Drop 🔻
🌎 Context: April 2, 2025
Today’s Trump tariff news set off a panic wave in the market — triggering a sharp sell-off in major indices. SPY, the S&P 500 ETF, lost grip on its HVL ($560) and flushed into a dealer short-gamma zone, where volatility surged as hedging flows flipped bearish.
Key Narrative:
* Macro shock = Tariff fears
* Market wasn’t positioned = IV spike + dealer scrambling
* Result = Gamma-driven slide with no call support nearby
🧭 Technical Breakdown – 1H Chart
🔻 Price Action:
* SPY broke down from $567-$565 support range.
* Panic candle sliced through HVL $560 and continued through $550, tagging $542.20 intraday low.
* The entire move below HVL now triggers short-gamma conditions.
📌 Support Zones:
* $544.82 (currently testing)
* $542.20 (session low)
* Below that? Thin air until $538–$535 zone from macro FVGs.
🔼 Resistance Zones:
* $550 = now resistance (2nd PUT Wall)
* $555 = 3rd PUT Wall (likely a pause/reload area)
* $560 = HVL / Former gamma support flipped resistance
🧠 GEX + Options Sentiment
💣 Gamma Exposure (GEX):
* 🚨 GEX flipped heavily negative under $560.
* HVL $560 has collapsed.
* Dealers are now short gamma, adding to volatility and forced selling pressure.
🔴 Gamma Risk Zones:
* PUT Support at $560 (-86.95% GEX)
* Walls stacked at $555 and $550 → now broken
* NO significant GEX support until $540 — more room to fall
📈 Options Oscillator:
* IVR 40.8 / IVx Avg 29.3 → Elevated volatility with room to run
* PUTS 83.3% dominance = bearish sentiment confirmed
* Red Red Blue GEX = maximum dealer pain, negative gamma loop
🧭 Trade Setups Based on Current Conditions
🐻 Bearish Breakdown (Primary Bias)
* Entry: Under $543 (below today's low)
* Target: $540 → $535
* Stop: Over $550 reclaim
* Contract: 0DTE/2DTE $545P or $540P for gamma scalping
* Note: Dealer hedging is directional, be precise and fast
🐂 Relief Bounce Setup (Low Conviction)
* Only valid if SPY reclaims $550 and shows slowing momentum
* Possible dead-cat bounce to $555–$560
* Prefer spreads due to high IV and fast time decay
📌 Key Levels Summary
HVL (Former Support) $560 Gamma flip zone — now resistance
Gamma Pivot $550 Broke down — keep an eye on it
Support Zone $542.20 Session low
Downside Target $540 → $535 If gamma slide continues
💭 My Thoughts: This Is a Gamma Meltdown
Today’s tariff headlines sparked a reflexive gamma cycle — as dealers flipped from long to short gamma, they were forced to hedge dynamically, driving SPY deeper into a liquidity vacuum.
This is not your regular dip — it’s a liquidity and dealer flow event, so everything moves faster, with wild swings possible into the close or tomorrow.
Unless SPY reclaims HVL at $560 fast, expect continuation or chop within this danger zone. VIX rising + GEX red = recipe for pain.
📢 Final Notes:
* Use defined risk.
* Don’t overstay puts.
* Gamma moves cut both ways — expect volatility.
* Track GEX hourly if possible.
Disclaimer: For educational purposes only. This is not financial advice. Always do your own research and protect your capital.
🌎 Context: April 2, 2025
Today’s Trump tariff news set off a panic wave in the market — triggering a sharp sell-off in major indices. SPY, the S&P 500 ETF, lost grip on its HVL ($560) and flushed into a dealer short-gamma zone, where volatility surged as hedging flows flipped bearish.
Key Narrative:
* Macro shock = Tariff fears
* Market wasn’t positioned = IV spike + dealer scrambling
* Result = Gamma-driven slide with no call support nearby
🧭 Technical Breakdown – 1H Chart
🔻 Price Action:
* SPY broke down from $567-$565 support range.
* Panic candle sliced through HVL $560 and continued through $550, tagging $542.20 intraday low.
* The entire move below HVL now triggers short-gamma conditions.
📌 Support Zones:
* $544.82 (currently testing)
* $542.20 (session low)
* Below that? Thin air until $538–$535 zone from macro FVGs.
🔼 Resistance Zones:
* $550 = now resistance (2nd PUT Wall)
* $555 = 3rd PUT Wall (likely a pause/reload area)
* $560 = HVL / Former gamma support flipped resistance
🧠 GEX + Options Sentiment
💣 Gamma Exposure (GEX):
* 🚨 GEX flipped heavily negative under $560.
* HVL $560 has collapsed.
* Dealers are now short gamma, adding to volatility and forced selling pressure.
🔴 Gamma Risk Zones:
* PUT Support at $560 (-86.95% GEX)
* Walls stacked at $555 and $550 → now broken
* NO significant GEX support until $540 — more room to fall
📈 Options Oscillator:
* IVR 40.8 / IVx Avg 29.3 → Elevated volatility with room to run
* PUTS 83.3% dominance = bearish sentiment confirmed
* Red Red Blue GEX = maximum dealer pain, negative gamma loop
🧭 Trade Setups Based on Current Conditions
🐻 Bearish Breakdown (Primary Bias)
* Entry: Under $543 (below today's low)
* Target: $540 → $535
* Stop: Over $550 reclaim
* Contract: 0DTE/2DTE $545P or $540P for gamma scalping
* Note: Dealer hedging is directional, be precise and fast
🐂 Relief Bounce Setup (Low Conviction)
* Only valid if SPY reclaims $550 and shows slowing momentum
* Possible dead-cat bounce to $555–$560
* Prefer spreads due to high IV and fast time decay
📌 Key Levels Summary
HVL (Former Support) $560 Gamma flip zone — now resistance
Gamma Pivot $550 Broke down — keep an eye on it
Support Zone $542.20 Session low
Downside Target $540 → $535 If gamma slide continues
💭 My Thoughts: This Is a Gamma Meltdown
Today’s tariff headlines sparked a reflexive gamma cycle — as dealers flipped from long to short gamma, they were forced to hedge dynamically, driving SPY deeper into a liquidity vacuum.
This is not your regular dip — it’s a liquidity and dealer flow event, so everything moves faster, with wild swings possible into the close or tomorrow.
Unless SPY reclaims HVL at $560 fast, expect continuation or chop within this danger zone. VIX rising + GEX red = recipe for pain.
📢 Final Notes:
* Use defined risk.
* Don’t overstay puts.
* Gamma moves cut both ways — expect volatility.
* Track GEX hourly if possible.
Disclaimer: For educational purposes only. This is not financial advice. Always do your own research and protect your capital.
Trade active
Scalping Game Plan (April 3, 2025)Bias: Bearish Focus: Opening Range Breakout (ORB) strategy on 5-min candle
🔻 Short Setup (Preferred)
* Entry: Break below 5-min low (likely < 543.60)
* Target 1: 542.00
* Target 2: 540.20
* Stop-loss: Above 5-min high (~545.50)
* Confirmation: MACD red + Stoch RSI curling down + VWAP rejection
🔼 Long Setup (Only if structure flips)
* Entry: Break above 5-min high (>545.50)
* Target 1: 547.20
* Target 2: 549.00
* Stop-loss: Below 5-min low (~543.60)
* Confirmation: MACD green + Stoch RSI bounce + volume surge
🧠 Notes:
* Wait for first 5-min candle to close before entering.
* No trade if price stays in the box → avoid chop.
* Let volume + retest confirm the move.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.