u/Admirable-Panic6524

I truly mean it when I say it was predictable. I was told this strategy is just cloudiness with extra steps but I see it as 30 minutes of analysis to save you from 6 hours of confusion. It's a 2 step process: Chart $UVXY and find SPY's HTF key levels.

Pre Market Analysis.

Below the green line (36.67) we can clearly see UVXY gets sold off the day prior. We note that with simple context: as long as we hold below that level with some SPY buyer aggression, longs look enticing.

Yellow zone is chop

Above the red line (37.10) volatility expands quickly: as long as there is seller aggression showing up on SPY thats the go ahead for shorts.

here is how that played out today:

Here is the market being a good girl and following my context.

Market opens: All the volatility dampening that happens below the green line sends SPY higher.

UVXY Bottoms out: The LOD on $UVXY sends us back up its yellow zone (back to open) but this still leaves SPY range bound for the day so no go head on puts without holding (37.10)

You already know what happened above that 37.10 level 👁️

SPY loses structure as volatility expands, this happens exactly at the 37.10 level.

At 11:20 today (8:20 AM PST) there is an amazing confluence between these two.

$UVXY flys through my level (37.10) while SPY breaks structure to the downside.

now here's how we reacted to the levels I set above (37.10):

nice rejection from the upper levels

Past the red line we chop at out the next level and then get sent to my higher levels.

Rejection from my highest level today (not including my trend line) sends SPY back up.

Pair what happened today with my pre market analysis, and you will see how a simple volatility watch can go a long way for guiding your day trades.

This is also not the only ticker you can use to gauge volatility so please note that paring these are not stand alone signals.

This was how I followed the flow of $SPY this Thursday (5/30).

I label each zone with context to watch for on $SPY.

Orange zones are highly reactive but in the bigger context they still sit within the red zone which we see volatility range in for a few hours the day prior.

Below the red zone fear dampens and SPY will likely rise/drift to price in the confidence.

Inside the (upper) green zone there has been little sell pressure on UVXY allowing for a quick spike in volatility targeting the well respected trend line above which dates back months at this point.

Here is live market context. (I don't sell anything)

My first trade of the day was this confluence between volatility falling and SPY rising. this is not a stand alone signal, both underlyings aligned with my key level, giving me the go ahead.

(fear declining, while confidence gets priced in)

In this final image you see we teeter between the red and green zone while SPY has an upward CHoCH, once we claim the green zone we go into the continuous upward drift that I mentioned that zone would likely provide.

ChoCH began above that $712.79ish area.

Quick note, I keep a 61.8 fib level inside of my zones as they can be wide (like this lower one) that fib level avoids me not knowing the context inside huge zones. $UVXY closed perfectly at the bottom of my zone this day as SPY claimed no mans land.

If you trade SPY what are you pairing it with for better context?

This was how I followed the flow of the market Thursday (5/30)

I label each zone with context to watch for on $SPY.

Orange zones are highly reactive but in the bigger context they still sit within the red zone which we see volatility range in for a few hours the day prior.

Below the red zone fear dampens and SPY will likely rise/drift to price in the confidence.

Inside the (upper) green zone there has been little sell pressure on UVXY allowing for a quick spike in volatility targeting the well respected trend line above which dates back months at this point.

Here is live market context. (I don't sell a discord, I document because I love this game)

My first trade of the day was this confluence between Volatility falling and SPY rising.

(fear declining, while confidence gets priced in)

In this final image you see we teeter between the red and green zone while SPY has an upward CHoCH, once we claim the green zone we go into the continuous upward drift that I mentioned that zone would likely provide.

ChoCH began above that $712.79ish area.

Quick note, I keep a 61.8 fib level inside of my zones as they can be wide (like this lower zone, and that fib level avoids me not knowing the context inside huge zones). $UVXY closed perfectly at the bottom of my zone this day.

UVXY - ProShares Ultra Vix Short-Term Futures ETF

I create a layered zone for the days possible range.

The first part of this zone only extends until 13:00 (10am). I take time into account because after 10am volatility often changes behavior completely. Go look at UVXY yourself and you will see the shift in behavior or ChoCh almost everyday at 10am (this is commonly known market behavior as we lead into the closing hours).

Each layer of our zone tells us the way volatility behaves and we pair the context of the zone with the structure of SPY. The overall confluence/divergence reveals the most favorable setups.

Here's quick chatgpt input so you can understand why this matters to my 0DTE system:

Here’s the actual flow:

S&P 500 options prices (SPX options)
⬇️ used to calculate
VIX (implied volatility index)
⬇️ then becomes
VIX futures contracts
⬇️ which UVXY tracks (with leverage + rolling)

🟡 Volatility confluence 🟠 Volatility Divergence (shift in behavior) 🟢 Volatility Confluence

This relationship Indirectly ties $UVXY to the options market even if it's not tracking options directly.

Here is an example of how this pre market volatility watch revealed the bigger picture today.

🟡Volatility Confluence (SPY pumps at key level while UVXY dumps at my indecision zone) that was my first call scalp of the day

🟠 Volatility Divergence (shift in behavior - fails to break the low twice while volatility still dampens)

🟢 Green circle: Volatility Confluence., we get a small CHoCH (def a liquidity grab) before SPY prices in the confidence and makes it continuous upward drift I mentioned this morning.

The rest of the drift behavior. Note that we retest the 61.8 fib level inside this zone at 12:00 (9 am) and the CHoCH in volatility starts right at 13:00 (10am).

Volatility takes another shift in behavior at 10am.

I've see a lot of Gamma/GEX traders recently and after some extensive research I still believe price action beats most tools. I like to remember that price is the final output of what's actually happening.

Let me know how I can refine or if I can help you apply this I can talk markets all day.