Records on Tuesday. Strikes overnight. Same tape Wednesday.

Dow and S&P kinda did what we thought – gap higher, traded lower. S&P slightly, Dow definitely. And just for a day – all four were ‘n sync. Right before Nazquack and Uncle Russ decided to hold hands overnight and skip through the meadows of new all-time highs.

Just when you thought the bear was limbering up again to put in a few laps on the track – the bull gets its wind up again and starts shouting put me back in coach – just one more lap.

Oil is right on the cusp of a range reversal or a breakout. The exhaustion bar at the range low looks like it could be nullified should the low get breached – then we’re on for the breakout and potentially a run lower to $80. Of course that hasn’t happened yet, and should the range reversal happen, a push to $104 and $115 – the mid and range highs – is on.

BTC 4-hour is still compressed between the VWAPs mentioned yesterday and should $75K get breached a push to $72K does seem likely. Right now we see prices at the range lows and attempting a breakout. The H&S potential mentioned yesterday now seems muddied – this is just another illustration of why it’s important not to get married to pattern names and update things with new information. Until the pattern is completed – which you only know after the fact – then you will never know the true name of the pattern in real time as it will always mutate and evolve. Better to recognize the phase of movement and not worry about the name. Technically it’s a consolidation – so we treat this zone as such, a.k.a. my 6 money-making patterns.

SPX and RUT swings did do the gap higher trade lower thing. SPX did highlight a new valid bear swing which again may again be flipped at the open if SPX follows Naz and Rus overnight moves.

We do see %R at a bullish extreme which does suggest a strong trend – this is unofficially part of the process until I’ve completed the updated research. That said, this is an older strategy I used for many years to ID strong moves.

RUT is also doing something similar – this time we do have the MACD-v in a bullish extreme so we can ignore the bear RUT TnT setup until we are out of the MACD-v extreme. As this is usually a continuation signal. %R is also showing a strong bullish swing – also still unofficial on the rule sets.

We reviewed the updated MACD-v swing rules just the other week in the Fast Forward group calls. The official training is coming soon as soon as the software updates are completed to support the updated rules.

Market Briefing:

Wednesday 27 May – Tuesday delivered records on the same day as Iran strikes. The tape picked records.

• Tuesday closed: SPX 7,519.12 +0.61% (record) / Nasdaq 26,656.18 +1.19% (record) / Dow 50,461.68 -0.23% / Micron +19% crossed $1 trillion

• Centcom self-defense strikes on southern Iran overnight Tuesday / IRGC fired on US aircraft / Brent +4% Tuesday to $99 – now -3.18% premarket back to $90.59

• Premarket snap: ES +0.33% / NQ +1.31% past NATH 30,118.75 / RTY +0.64% past NATH 2,928.30 / YM +0.40%

• BTC at $75,922 / six straight days of spot ETF outflows totaling $1.55B / institutions arrived and quietly left

• Today: ~48 S&P names report including Dick’s, Marvell, Salesforce, Synopsys, Snowflake / PCE Thursday / Warsh’s first FOMC June 16-17

Market Snapshot

• ES: 7,557.50 / +24.75 (+0.33%) / NATHs 7,569.75 / ticks from a fresh print

• YM: 50,722 / +202 (+0.40%) / NATHs 51,209 / Uncle Dow lagging again

• NQ: 30,215.50 / +379.25 (+1.31%) / past NATH 30,118.75 / Nazquack already in the meadow

• RTY: 2,944.10 / +18.70 (+0.64%) / past NATH 2,928.30 / Uncle Russ holding her hand

• GC: 4,487.50 / -19.80 (-0.44%) / haven bid trimmed again

• CL: 90.59 / -2.98 (-3.18%) / at the channel lower boundary

• VIX: 16.97 / -0.03 (-0.18%) / generous given Tuesday’s headlines

• BTC: 75,922.01 / +95.91 (+0.13%) / range lows, attempting a breakout

Tag ‘n Turn

SPX printed a new valid bear swing at Tuesday’s close. Premarket gap higher may flip it again. RUT also showing bear TnT setups but MACD-v in bullish extreme says ignore – continuation signal. %R bullish extreme on both adds weight to the continuation read. The official open will tell.

Two charts. Same setup pattern. Same overriding indicator readings. The system rules under update suggest the bear signals are noise inside the current extreme readings, but the price action will be the final judge. Bear setups are valid, but the bull wants one more lap.

SPX Analysis

New valid bear swing printed at Tuesday’s close. Bearish Below 7,515.44 / PFZ 7,539.09 / Target 7,392.73. W%R at bullish extreme suggests a strong trend – unofficially a continuation signal. Premarket gap higher would void the swing.

The Bearish TnT signal printed top-right on the 30-minute as price faded off the upper Bollinger Band into the Tuesday close. Cash closed at 7,519.11, sitting between the 7,515.44 trigger and the 7,539.09 PFZ – signal printed, trigger not yet hit. The PFZ Flip annotation visible on the chart is the line that decides whether this becomes an active short or gets voided.

ES at 7,557.50 in premarket,. If the cash open holds anywhere near that level, the bear swing voids and the next read becomes the continuation of Tuesday’s record-print sequence.

The %R is sitting at the bullish extreme – which on the older but reliable strategy framework. The MACD-v reading at 135.37 is also deep in positive territory. but not quite at the official extreme reading.

The configuration is the gap-higher-or-fade question, with the system update suggesting that even a triggered bear swing inside the current %R extreme reads as noise rather than reversal. The official open is the tell.

Current Status: Bearish Below 7,515.44 / PFZ 7,539.09 / Target 7,392.73

Gamma Exposure

Gamma flip 6,796.93, well below cash. Put wall 7,400, call wall 7,500. Massive call gamma nodes at 7,500, 7,530, 7,575, and 7,600 – the dealer hedging path is well-mapped above. IV at 14.11%, IV Percentile 52%.

The call gamma profile is unusually well-distributed today, with significant nodes spaced every 25-30 points from 7,500 up to 7,600. That kind of layered call wall is what dealer hedging looks like when the market is grinding higher into successive strikes – the path of least resistance is upward in chunks, with brief pauses at each node as dealers manage the exposure.

The flip at 6,796.93 sits roughly 720 points below cash. Deep positive gamma. The gap higher with price pushing back to defended levels from yesterday is precisely the dealer mechanic operating here.

IV at 14.11% against historic 10.42% is slightly elevated. IV Percentile 52%, IV Rank 22.02% – both sitting around the median of the recent range. The market is not pricing tail risk into today’s session.

Current Status: Flip 6,796.93 / Put Wall 7,400 / Call Wall 7,500 / IV 14.11% / HV 10.42% / IVR 22.02% / IVP 52%

RUT Analysis

Bear TnT setup printed but MACD-v in bullish extreme overrides – this is usually a continuation signal under the updated rules. Bearish Below 2,912.69 / PFZ 2,923.04 / Target 2,802.43. W%R at -93.79, deep in the bullish extreme zone.

The chart shows multiple Bearish TnT annotations through the recent move, but each one has been overridden by the price action staying inside the bullish extreme zones on both %R and MACD-v. handwritten “Extreme.” on the chart highlights the W%R reading at -93.79 – one of the deepest bullish extreme readings on the recent record.

The updated MACD-v swing rules reviewed in the Fast Forward group calls treat this configuration as a continuation signal: when MACD-v is in the bullish extreme, the bear TnT setup is ignored until momentum exits the extreme zone. The reasoning is empirical – the bullish extreme on a strong move historically resolves into more upside, not reversal.

RTY at 2,944.10 in premarket is well above the 2,923.04 PFZ. The cash open at anywhere near that level voids the bear setup outright. NATHs at 2,923.04 (the chart marks this as same as PFZ) and the premarket already past it.

Current Status: Bearish Below 2,912.69 / PFZ 2,923.04 / Target 2,802.43 / MACD-v + %R both at bullish extreme = continuation read

BTC Analysis

BTC 4-hour is still compressed between the VWAPs mentioned yesterday. Should $75K get breached, a push to $72K does seem likely. Right now prices at the range lows attempting a breakout. The H&S potential mentioned yesterday now seems muddied – this is why you don’t get married to pattern names.

The 4-hour chart shows price now compressed in a tight band between the rising VWAP from the recent lows and the descending VWAP from the May highs. Bear Entry annotation visible at 76,385.00 with the Stop Loss at 77,834.55 – the bear setup the system is currently watching.

What was being read yesterday as a potential inverted head and shoulders is now harder to identify cleanly. The pattern has mutated, which is exactly the failure mode that gets traders into trouble: the right-shoulder doesn’t form where it should, the neckline shifts, the projected target changes – and by the time the pattern resolves, it was never the pattern you thought it was.

The honest read: this zone is consolidation. The 6 money-making patterns framework treats consolidation as its own animal, not as a pending pattern looking for a name. The $75K line is the level that decides whether this consolidation breaks down toward $72K or breaks up back toward the upper VWAP.

Current Status: Bear Entry 76,385 / Stop 77,834.55 / Compressed between VWAPs / $75K is the line / $72K below if it breaks

CL Analysis

Oil right on the cusp of a range reversal or a breakout. The exhaustion bar at the range low could be nullified should the low get breached. $80 if the channel breaks. $104 and $115 the mid and range highs if the range holds.

CL futures at 90.59 in premarket, down 3.18%. The daily chart shows price sitting precisely on the lower boundary of the rising channel that has framed Brent and WTI since March. The most recent candle is testing the channel low with what could be an exhaustion bar – or what could be the bar that breaks the structure entirely.

The framework today is binary. Either the channel holds and oil rallies back through the midline at $104 toward the upper channel boundary at $115. Or the channel breaks and the structural target shifts to the 200-day moving average around $82-85, with $80 the round-number magnet just below.

Tuesday’s strike news pushed Brent +4% to $99 in a single session. The follow-through has not held. That kind of failed reaction to a war-premium catalyst is itself the tell – if the bid does not stick on actual military action, the structural pressure is downward not upward.

Current Status: Channel low test live / $80 if breaks / $104 then $115 if range reverses

Rounding Off

Records On Floor One. Strikes On Floor Two. Same Building. Tuesday’s session closed at fresh records on the same trading day US Central Command conducted self-defense strikes on Iranian targets. The IRGC fired on US aircraft. Brent ran 4% to $99 on the strike headlines. The equity tape ran 0.61% higher to 7,519.12 on a separate set of headlines that included Polymarket peace odds jumping to 37% from 14% Friday. The two tapes are looking at different newspapers, which is the configuration the chart-reads on SPX and RUT now have to resolve at the open.

Six Days Red. Institutions Quietly Left. BTC marked its sixth consecutive day of spot ETF outflows totaling $1.55B since May 14. Jane Street cut BTC ETF exposure 70% in Q1. CryptoQuant’s 30-day apparent demand indicator turned negative, the worst reading since December. The hedge against everything became, briefly, the hedge against this. PCE Thursday is the macro catalyst that decides whether the institutional bid returns or the consolidation breaks toward $72K.

Expert Insights

The bull wants one more lap. The bear is limbering up on the track. The MACD-v is in the bullish extreme and saying continuation. The Bearish TnT signal printed Tuesday and is saying reversal. Each one of these reads can be defended individually. None of them gets to be the hero.

The job is to read what the open prints and respond to it, not to insist on the read you walked in with. The discipline on not getting married to pattern names sits in the same place as Jones’s discipline on ego. The pattern mutates. The setup voids. The next signal arrives. The trader either updates or loses.

[Source: Jack Schwager, Market Wizards: Interviews with Top Traders, HarperBusiness, 1989, public]

Fun Fact:

David Bowie’s “Heroes” was released on 23 September 1977, the title track from his eleventh studio album. The song was recorded at Hansa Studios in West Berlin, in a recording room with a window that overlooked the Berlin Wall. Producer Tony Visconti later described the recording as “looking East over the Wall at the guards looking back.”

The lyric “we could be heroes, just for one day” became one of Bowie’s most enduring lines. The song peaked at number 24 in the UK on initial release – modest by Bowie standards – but has since become a cultural touchstone, used everywhere from sports highlight reels to Olympic ceremonies.

The four indexes did not maintain harmony beyond Tuesday’s close. Nazquack and Uncle Russ broke formation overnight.

[Source: David Bowie official discography / Tony Visconti production notes, davidbowie.com and tonyvisconti.com, public]

Trade well,
T2 Markets

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