Hello, TheoWave!

Welcome to the first trading day of September — historically one of the most important months when it comes to market volatility.

August was a challenging but exceptionally strong trading month for TheoWave. The Aggressive Scalper Account generated approximately +170% net return, with the entire process traded and shared live with the community.

Before moving into today’s updated charts, please review our latest ProService update from Friday, Aug 28 — the Jackson Hole session.

We’ll use that framework as the foundation for today’s updated trading plans and triggers.

TheoWave

Jackson Hole in Focus — Protect Profits, Trade the Triggers

Happy Friday, TheoWave…

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4 days ago · 6 likes · TheoWave

DXY & US10Y

Both the U.S. Dollar and Treasury yields have followed the Main Trading Plan.

US10Y broke above its bullish trigger and rallied sharply toward 4.78%, while DXY has remained below its own bullish trigger. This divergence means the Dollar is not confirming the advance in yields yet.

I’ve placed updated triggers. As long as both markets remain below their bullish confirmation levels, we should be prepared for a more complex and potentially choppy environment across Forex and Metals.

FOREX

Both Fiber and Loonie are following the Main Trading Plan.

Please follow the updated triggers for the next directional confirmation.

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Thursday’s bullish structure — supported by Positive Gamma, strong Delta Flow and improving Vanna — has deteriorated sharply. Today, front-end Gamma has flipped negative, intraday Delta has turned bearish, Vanna has weakened, and forward Skew is becoming increasingly defensive.

SPX is now testing the critical 7710–7720 decision zone, while 7680 stands out as the next major downside confirmation level.

This daily TheoWave report combines dealer Gamma exposure, Vanna, probability distributions, Skew, positioning, DX Surface and real-time Options Flow to identify changes in market structure that price action alone may not reveal.

Today’s key question is no longer whether SPX can extend Thursday’s breakout — it is whether the market can defend 7710 before Negative Gamma begins amplifying the downside.

TheoWave SPX Options Models

Friday, Aug 28 — 2:30 PM ET
SPX: 7712.56 | -18.43

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Happy Friday, TheoWave!

We’ve had a phenomenal trading week at TheoWave, and the Live Trading results have been exceptional. The accuracy and execution this week have been outstanding.

Today, however, I want to be particularly cautious. With the Jackson Hole Fed conference, we need to assess the market environment before the NY open — especially whether we are operating in a Positive or Negative Gamma regime — before defining today’s strategy.

My priority today is protecting this week’s profits. I’ll focus primarily on short-duration moves, limited exposure, and lower R:R opportunities rather than taking unnecessary risk. However, if a clear high-confidence opportunity develops, I’ll follow it.

We also have a high-impact Fed speech at 10:00 AM ET, so volatility could increase significantly around that window.

Please review the Aug 26 trading setups before moving on to today’s updated charts.

DXY & US10Y

Both the U.S. Dollar and Treasury yields remain trapped between their respective bullish and bearish triggers, providing no confirmed directional signal yet.

Please review the related commentaries in the previous reports for the broader trading plan and confirmation levels.

FOREX

Both Fiber and Loonie have followed the Main Trading Plan and the defined setups have been executed.

Please manage partial profits, move the remaining positions to risk-free, and monitor the updated triggers for the next move.

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After several sessions of compression, SPX has finally escaped its previous equilibrium and moved above the critical 7720 expansion threshold. More importantly, this breakout is now being confirmed beneath the surface: Delta has surged, Flow Ratio has moved above 1.00, Vanna has strengthened, the probability equilibrium has migrated higher, and front-end Gamma has shifted into a Positive Gamma regime.

This is exactly why we developed the TheoWave Options Models.

Rather than looking at price action alone, TheoWave combines MAP/Vanna, IP probability distributions, Skew, JOY positioning, DX Surface, Gamma structure, and real-time Options Flow to understand how institutional positioning and dealer dynamics may influence SPX before making trading decisions.

Today’s report identifies 7720–7740 as the new support/magnet zone, while 7750 becomes the key continuation trigger. Above it, the major options convergence zone sits around 7775–7800.

Today’s Report Is FREE

I’m making today’s complete TheoWave SPX Options Models report available free to everyone.

This is only one part of the institutional-style analysis TheoWave members receive on a daily basis, alongside our broader market framework, trading setups, intermarket analysis, and live market commentary.

If you find this research valuable, subscribe to TheoWave and consider upgrading your membership to receive our premium daily reports and gain access to TheoWave Live Trading sessions, where you can follow the framework and execution process in real time.

Analyze. Plan. Execute.

TheoWave SPX Options Models

Thursday, Aug 27 — 1:30 PM ET
SPX: 7736.53 | +60.83

Today marks an important structural change. SPX has finally escaped the multi-session compression around 7650–7690 and is now trading above the previous 7720 bullish expansion threshold. The options complex has migrated higher with price, supporting the breakout, although SPX is now approaching a more significant overhead positioning zone.

MAP / Vanna

The MAP structure has shifted materially higher.

The positive Vanna pocket now extends into approximately 7720–7740, placing spot directly around the upper portion of the new supportive region.

Aggregate Vanna readings are:

Negative Vanna: -537K
Positive Vanna: +258K

Positive Vanna has strengthened significantly compared with Wednesday. Although negative Vanna still dominates on an aggregate basis, the increase in positive Vanna around spot suggests that the options structure is accepting rather than rejecting the rally.

Key levels:

7720–7740: Primary Vanna Support / Magnet
7745–7750: Upside Transition
7790–7800: Major Upper Positioning Zone

Importantly, 7720 has changed its role. It was previously our bullish expansion trigger; after today’s breakout, it should now be treated as a key structural support and breakout-validation level.

IP Probability Model

The IP equilibrium has also migrated higher toward approximately 7735–7740, almost exactly where SPX is currently trading.

For Aug 28, the distribution expands substantially:

Upper region: ~7775–7795
Lower region: ~7670–7700

For Aug 31, the distribution becomes wider:

Upper extension: ~7810
Lower extension: ~7650

This confirms two things.

First, today’s upside move has shifted the probability distribution higher.

Second, the market still carries meaningful expansion potential in both directions. The current price is once again close to the center of a newly established equilibrium rather than at an extreme of the probability distribution.

Skew

Skew remains the main cautionary component.

Several defensive components increase sharply into Aug 28, while the red component continues rising further into Aug 31 and Sep 2.

Therefore, the options market is accepting higher SPX prices while continuing to price forward tail protection.

This is not an immediate bearish signal, but it means:

Bullish price structure does not equal disappearance of downside risk.

The rally remains structurally supported, but forward hedging demand argues against complacency.

JOY Positioning

JOY has become much more relevant because SPX has now reached the first major upside positioning cluster.

The strongest nearby activity is concentrated approximately around:

7740–7800

with particularly significant activity immediately above current spot.

A second major concentration appears around:

8000

but that remains too distant to use as an immediate tactical target.

The important implication is that 7775–7800 is no longer a distant upside objective. SPX has entered the lower edge of that positioning structure, so resistance and two-way dealer activity can increase as price approaches 7800.

Gamma Regime / Gamma Flip

Based on the latest GxOI term structure available to us, Gamma exposure has been consistently negative across the major expirations.

Therefore:

Gamma Regime: Negative Gamma

This matters significantly after today’s breakout. In a negative-Gamma environment, dealer hedging is more likely to amplify directional moves rather than suppress them.

Consequently, sustained trading above the former 7720 expansion threshold can increase the probability of faster movement toward the upper positioning zones.

However:

Gamma Flip: Not directly confirmed from the current dataset.

We should not manufacture a Gamma Flip price from MAP or DX. A precise Zero-Gamma level requires GEX/GxOI across strikes or simulated spot levels.

For today’s roadmap, 7720 should therefore be treated as a regime-validation level, not as the mathematically confirmed Gamma Flip.

Change From Wednesday

Wednesday’s structure gave us:

7690: Initial bullish trigger
7720: Bullish expansion confirmation

SPX is now trading at 7736.53.

Both thresholds have therefore been cleared.

More importantly:

Vanna equilibrium migrated higher.
Positive Vanna strengthened materially.
IP equilibrium moved toward 7740.
SPX entered the first major JOY upside cluster.
Negative Gamma increases breakout sensitivity.

The evidence therefore supports upgrading the options bias from Wednesday’s neutral-to-mildly bullish structure to a confirmed bullish expansion regime.

TheoWave Scenario Probabilities

Bullish Scenario — 55%

This remains the primary scenario while SPX holds above 7720–7730.

Acceptance above 7750 favors:

7775 → 7790/7800

A clean break above 7800 would increase the probability of extension toward:

7810 → 7830+

Negative Gamma could amplify the move if momentum continues.

Neutral / Consolidation Scenario — 25%

After today’s approximately 60-point advance, SPX could consolidate inside:

7720–7780

The new 7720–7740 Vanna pocket could act as a magnet while positioning adjusts to the breakout.

This would not invalidate the bullish structure as long as 7720 remains protected.

Bearish Scenario — 20%

The first warning would be rejection from 7750–7800 followed by a move back below 7720.

That would expose:

7700 → 7690 → 7670

A sustained move below 7670 would materially weaken today’s breakout and reopen the previous equilibrium structure.

TheoWave Final Trading Scenario

Overall Options Bias: BULLISH

Bullish Probability: 55%
Neutral Probability: 25%
Bearish Probability: 20%

Primary Support / Magnet: 7720–7740
Bullish Continuation Trigger: 7750
First Target: 7775
Major Target / Resistance: 7790–7800

The most important development today is not simply that SPX rallied. It is that the options equilibrium migrated higher with price and the previous 7720 expansion threshold has been successfully cleared.

As long as 7720 holds, the preferred scenario remains continuation toward 7775–7800.

At the same time, SPX is now entering a substantial positioning cluster. Combined with elevated forward Skew, this means 7800 should be treated as an important decision zone rather than assuming unrestricted upside continuation.

TheoWave SPX DX Surface Model

Thursday, Aug 27 — 1:30 PM ET
SPX Reference: ~7736

The updated DX surface confirms the structural shift already visible in MAP and IP. SPX has moved out of the previous lower equilibrium basin and is now trading directly around an important surface transition zone near 7730–7750.

DX Surface Structure

The most relevant price ladder visible on the current surface is approximately:

7650 → 7680 → 7715 → 7745 → 7775 → 7805 → 7835

The key development is that the market has already cleared the previous 7715–7720 transition area.

Below that level, the DX surface was relatively depressed and supportive of compression. Above it, the surface rises much more aggressively.

This means the current market is no longer behaving like the compressed structure we observed earlier this week.

It has entered an expansion-sensitive region.

Upside Structure

The immediate transition is around:

7740–7750

A sustained move through this zone would place SPX onto the steeper section of the upper DX surface.

The next structural objectives are:

7775 → 7805

Above approximately 7800–7805, another extension toward:

7835

becomes possible.

This is particularly important because the earlier models independently identified:

JOY: major positioning around 7750–7800
IP: Aug 28 upper distribution around 7790–7795

So 7775–7805 now represents a high-confidence cross-model convergence zone rather than simply a DX target.

Downside Structure

The first important downside level is:

7715–7720

A move back below this region would return SPX toward the boundary of the previous surface basin.

Below that:

7680–7690

becomes the next important area.

A deeper deterioration would expose:

7650–7655 → 7620

Therefore, the downside sequence is:

7720 → 7690 → 7650 → 7620

The significance of 7720 has changed substantially during the week.

Earlier it was our bullish expansion trigger.

After today’s breakout, it has become the first important breakout-validation support.

Gamma Regime / Gamma Flip

Based on the latest GxOI term structure previously provided:

Current Gamma Regime: NEGATIVE

This makes the DX breakout particularly important.

In a negative-Gamma environment, dealer hedging tends to reinforce directional movement. Therefore, once SPX moves away from an equilibrium basin, realized volatility can increase rather than being systematically suppressed through mean reversion.

This supports the possibility of faster movement toward 7775–7805 if 7750 is cleared.

However:

Gamma Flip: Not directly confirmed

The current DX surface does not provide sufficient information to calculate an exact Zero-Gamma price. Therefore, 7720 should not be called the Gamma Flip.

Instead:

7720 = DX / options regime-validation level

A precise Gamma Flip will require GxOI/GEX across strikes or simulated spot levels.

Cross-Model Confirmation

The models are now showing unusually good agreement:

MAP/Vanna: equilibrium migrated toward 7720–7740.

IP: probability center migrated toward ~7740, with Aug 28 upside expansion toward ~7790.

JOY: major positioning concentration begins immediately above spot and extends toward ~7800.

DX: SPX has left the previous basin and entered an upward-sloping expansion surface.

Gamma: negative regime increases sensitivity to directional continuation.

Skew: forward protection remains elevated, preventing us from treating the structure as risk-free bullish.

This is a stronger bullish options configuration than we had earlier in the week.

TheoWave Scenario Probabilities

Bullish — 60%

This probability increases slightly after adding DX confirmation.

Holding above 7720 and clearing 7745–7750 favors:

7775 → 7790/7805

A sustained break above 7805 could extend toward 7835.

Negative Gamma could accelerate this pathway once momentum develops.

Neutral / Consolidation — 25%

SPX could remain contained approximately between:

7720–7780

after today’s strong advance.

The migrated Vanna equilibrium around 7720–7740 could produce temporary stabilization before the next directional move.

Bearish — 15%

A failure at 7750–7800 followed by a confirmed return below 7720 would weaken today’s breakout.

That would expose:

7690 → 7650

A deeper break below 7650 would reopen 7620.

TheoWave Final Trading Scenario

Overall Options Bias: BULLISH

Bullish: 60% | Neutral: 25% | Bearish: 15%

Gamma Regime: Negative
Gamma Flip: Not directly confirmed

Primary Support: 7715–7720
Immediate Bullish Trigger: 7745–7750
Target 1: 7775
Major Target: 7790–7805
Extended Target: 7835

The strongest message from DX is that SPX has transitioned from compression into expansion.

As long as 7715–7720 holds, the options structure favors continuation higher, with 7775–7805 representing the strongest current convergence zone across DX, IP and JOY.

Because the broader Gamma regime is negative, a confirmed break above 7750 could produce a faster move than the previous positive-Vanna stabilization phase would normally imply.

TheoWave SPX Intraday Options Flow

Thursday, Aug 27 — 1:30 PM ET
SPX: 7732.73

The Flow model provides stronger confirmation of today’s bullish expansion than we had on Wednesday. The most important development is that price, Delta and Flow Ratio are now aligned positively, although the call/put value structure still reflects substantial hedging activity.

Delta Structure

Net Delta has risen dramatically to approximately:

+94.7K

This is a major improvement from Wednesday’s +8.4K reading.

More importantly, Delta has been trending persistently higher through most of the session and reached a fresh intraday high while SPX was trading near its highs.

This is exactly the type of confirmation we wanted to see after the breakout above the previous 7720 expansion threshold.

The relationship is currently:

SPX higher + Delta higher = Bullish confirmation

There is no meaningful bearish price/Delta divergence yet.

Flow Ratio

The Flow Ratio is currently:

1.23

This is another significant improvement:

Aug 26: 0.74
Aug 27: 1.23

Yesterday, one of the main reasons we remained cautious was that the price recovery was not confirmed by Flow Ratio.

That condition has now changed.

A sustained reading above 1.00, combined with strongly positive Delta, materially improves the quality of the current upside move.

Therefore, today’s rally is better supported internally than Wednesday’s recovery.

Call / Put Value Structure

Current readings show a very large divergence:

Call Value: approximately +$458M
Put Value: approximately -$295M

The late-session development is particularly constructive.

Call value has strengthened again while put value has continued deteriorating, creating a much stronger directional separation between the two series.

Combined with positive Delta and Flow Ratio above 1, this suggests that the current options flow is no longer simply defensive repositioning.

It has developed a clearer bullish directional character.

Intraday Flow Sequence

The progression through the session is important.

During the morning, SPX gradually advanced while Delta steadily increased.

Around 11:15–11:45 ET, there was substantial repositioning and temporary instability across the options-value measures.

But after approximately noon, the structure became cleaner:

SPX advanced
Delta accelerated higher
Flow Ratio remained constructive
Call/put value divergence expanded

By approximately 1:00 PM, SPX was trading near the session highs while Delta was also near its highs.

That is considerably stronger confirmation than we observed over the previous sessions.

There is, however, a small late pullback in SPX while Delta remains elevated. For now this looks more like price consolidation than confirmed flow deterioration.

Gamma Regime / Gamma Flip

From the latest GxOI term structure:

Gamma Regime: Negative

This makes today’s positive Flow confirmation especially relevant.

Negative Gamma combined with:

Positive Delta acceleration
Flow Ratio > 1
Bullish price breakout

can create a feedback environment in which dealer hedging amplifies upside movement.

In simplified terms:

Price rises → hedging demand can reinforce buying → price expansion accelerates

This supports the possibility that a confirmed break through the next resistance cluster could produce a relatively fast extension.

Gamma Flip: Not directly confirmed from the available dataset.

Therefore, we should continue treating 7720 as the structural breakout-validation level, not as a mathematically confirmed Gamma Flip.

Cross-Model Confirmation

Today we now have unusually strong agreement across the TheoWave Options framework:

MAP / Vanna: equilibrium migrated higher toward 7720–7740, with Positive Vanna strengthening.

IP: probability equilibrium shifted toward approximately 7740, with upside distribution toward 7790–7810.

JOY: major upside positioning is concentrated around 7750–7800.

DX: SPX has transitioned from the previous compression basin into an expansion-sensitive region.

Gamma: negative regime increases directional amplification potential.

Flow: Delta +94.7K and Flow Ratio 1.23 now provide direct bullish confirmation.

This makes Flow one of the strongest confirmations of today’s breakout.

Updated TheoWave Scenario Probabilities

Bullish Scenario — 65%

The bullish probability increases from the previous 60% to 65% after adding Flow confirmation.

As long as SPX remains above 7720–7730, the preferred path remains:

7750 → 7775 → 7790/7805

A clean break through 7805 could extend toward:

7835

Negative Gamma could increase the speed of this move.

Neutral / Consolidation — 20%

After today’s strong rally, SPX could temporarily consolidate around:

7720–7780

without invalidating the bullish structure.

The migrated Vanna pocket around 7720–7740 remains the most logical magnet during any consolidation.

Bearish Scenario — 15%

The bearish case requires more evidence now.

The first warning would be deterioration in Delta and Flow Ratio together with a return below 7720.

That would expose:

7690 → 7670 → 7650

A deeper loss of 7650 would materially damage today’s bullish expansion structure.

TheoWave Final Options Read

Overall Options Bias: BULLISH

Bullish: 65% | Neutral: 20% | Bearish: 15%

Gamma Regime: Negative
Gamma Flip: Not directly confirmed

Delta: Strong Positive +94.7K
Flow Ratio: Bullish at 1.23

Primary Support: 7720–7730
Continuation Trigger: 7750
Target 1: 7775
Major Target: 7790–7805
Extension: 7835

The key development is that today’s price breakout is now confirmed by the internal options flow.

Unlike Wednesday, when price strength was accompanied by weak Flow Ratio, today we have higher SPX, strongly rising Delta and Flow Ratio above 1.00 simultaneously.

Combined with the Negative Gamma regime, this increases the probability that a confirmed break through 7750 can accelerate toward the 7775–7805 options cluster rather than immediately reverting toward the old equilibrium.

TheoWave SPX Options — Final Read

Thursday, Aug 27 — 1:30 PM ET
SPX: ~7733–7737

The latest Gamma table materially strengthens today’s bullish options picture.

Gamma / GxOI

The key change versus Aug 26 is that the Gamma structure has flipped strongly positive across the front expirations:

Aug 27: +493 GxOI
Aug 28: +102
Aug 31: +88
Sep 1: +20
Sep 2: +20

Aug 27 is especially important:

Calls: +727
Puts: -234
Net GxOI: +493

So today’s front-end structure is now clearly Positive Gamma, versus the slightly negative structure we observed yesterday.

This changes one part of our previous interpretation: although today’s breakout has strong directional confirmation, dealers now have considerably more capacity to dampen volatility and promote mean reversion, especially near the new equilibrium.

Gamma Regime: POSITIVE

Gamma Flip: The regime has clearly flipped from yesterday’s negative GxOI to positive today, but the exact price-level Gamma Flip cannot be calculated from this expiry-level table. We should not label 7720 as the mathematical Gamma Flip.

Other Greek Confirmation

The aggregate Aug 27 structure is also constructive:

DxOI: +44.42K
VxOI: +504K
Vanna x OI: +39.94K
Charm x OI: -15.02M

Most importantly, Gamma + Delta + Vanna are now simultaneously positive in the front expiry.

Combined with today’s Flow data:

Flow Delta: +94.7K
Flow Ratio: 1.23

this represents considerably stronger internal confirmation than we had earlier this week.

Final Cross-Model Picture

MAP shows the equilibrium migrating higher toward 7720–7740.

IP has shifted its probability center toward 7740, with upside expansion toward approximately 7790–7810.

DX confirms that SPX has escaped the previous compression basin.

JOY shows major positioning around 7750–7800.

Flow is bullish with strongly positive Delta and a ratio above 1.

And now GxOI confirms a front-end Positive Gamma regime.

The only meaningful caution remains forward Skew and the substantial positioning concentration approaching 7790–7800.

Final Scenario Probabilities

Bullish: 60%
Preferred while SPX holds 7720–7730. Above 7750, the path remains 7775 → 7790/7800.

Neutral / Consolidation: 30%
Positive Gamma increases the probability of pinning and mean reversion around the new 7720–7750 equilibrium, so I would raise the neutral probability slightly.

Bearish: 10%
A sustained loss of 7720 would be the first warning, exposing 7690 → 7670.

TheoWave Final Signal

Options Bias: BULLISH

Gamma Regime: POSITIVE
Vanna Regime: POSITIVE
Delta/Flow: STRONGLY POSITIVE
Gamma Flip Price: Not directly confirmed

Support / Magnet: 7720–7740
Continuation Trigger: 7750
Target: 7775
Major Resistance / Target: 7790–7800

Bullish 60% | Neutral 30% | Bearish 10%

The key takeaway is that today’s rally is internally confirmed, but the shift into Positive Gamma means the market may now become more controlled and mean-reverting near the new equilibrium. Therefore, 7750 is the key continuation trigger, while 7790–7800 remains the major upside decision zone.

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Good morning, TheoWave!

The market has remained choppy and largely neutral over the past two trading sessions, despite USOIL declining more than 7%.

This neutral reaction suggests that the broader market does not yet view the recent oil correction as a confirmed regime change into a bearish cycle.

However, we should remain cautious. When the market stays neutral and compressed for more than two sessions, it can often represent a positioning phase before directional expansion.

So today, rather than anticipating direction, we should closely follow our intermarket triggers and confirmation models.

We also have two important catalysts on the calendar: GDP data and crude oil inventories, both of which could influence today’s cross-asset dynamics.

Please review the Aug 24 report before moving on to today’s updated charts.

All previously defined trading setups remain valid, but I’ve made a few optimizations for today’s session.

No additional explanation is needed — simply review the trading plan first, then proceed to the updated charts.

DXY & US10Y:

FOREX:

Read more

Across TheoWave’s options models, 7650–7680 remains the immediate decision zone, while IP, Skew, DX Surface, and late-session Flow suggest that the current compression is unlikely to persist indefinitely. The key is not to chase price inside equilibrium, but to prepare for the eventual expansion.

For today, 7680 and 7650 are the initial triggers, while 7720 and 7620 remain the more important structural confirmation levels for the next directional move.

TheoWave SPX Options Models

Tuesday, Aug 25 — 1:30 PM ET
SPX: 7665.89

MAP / Vanna

SPX is trading almost exactly inside the strongest near-spot Vanna pocket, concentrated around 7660–7675. This remains the primary magnet and equilibrium zone.

Read more

In today’s TheoWave SPX Options Models Report, I combine our core quantitative options frameworks — including positioning, probability distribution, volatility structure, Skew, dealer-sensitive exposures, and real-time options flow — to evaluate the market from multiple perspectives.

The goal of this report is to identify where institutional options positioning is concentrated, how the underlying structure is evolving, and which conditions could define the next meaningful SPX move.

For paid subscribers, the full report below provides the complete TheoWave Options Roadmap for SPX, including key levels, directional triggers, cross-model confirmation, and the tactical scenario for the sessions ahead.

TheoWave SPX Options Models

Monday, Aug 24 — 12:00 PM ET
SPX: 7665.79

MAP / Vanna

The MAP structure is highly compressed and two-sided around the current price, with SPX trading very close to an important regime-transition area.

Read more

HELLO, THEOWAVE!

We had a strong trading week, and the TheoWave Live Trading sessions delivered some excellent opportunities. This week, the goal is to stay disciplined, follow the process, and build on those results.

From a macro perspective, geopolitical risk remains extremely elevated. The intensification of U.S. economic pressure on Iran, combined with the deterioration in Iran’s economic conditions, increases the risk of further escalation and potential retaliation against U.S. interests or regional allies.

However, we should not treat any specific military action as inevitable or trade based on headlines alone.

For TheoWave, one of the most important confirmation markets remains USOIL. A sustained acceleration in crude could signal that the market is beginning to price a larger geopolitical and energy-risk premium — with potential implications for equities, metals, yields, and broader risk sentiment.

As always:

We acknowledge the geopolitical risk — but we trade the price, the models, and the predefined triggers.

Before moving into today’s updated charts and trading plans, please review the August 20 TheoWave trading setups carefully.

Also make sure to review the updated intraday commentaries, live-session notes, and trade-management updates shared afterward, as several important developments and adjustments were discussed in real time.

Understanding how the previous roadmap evolved is essential before approaching today’s new setups.

Review the August 20 plan → Review the updated commentaries → Then move to today’s charts and triggers.

Analyze. Plan. Execute.

DXY & US10Y:

Both DXY and US10Y remain below their predefined bullish triggers.

As long as they fail to confirm a directional move together, we should remain cautious with Forex and Metals trading signals, as the intermarket confirmation remains incomplete.

My expectation is that we could potentially see both DXY and US10Y turn higher during this week, but I will not anticipate that move before the triggers confirm it.

For now, follow the predefined levels and let DXY and US10Y provide the directional confirmation first.

FOREX:

Both Fiber (EURUSD) and Loonie (USDCAD) have followed the Main Trading Plan.

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HELLO, THEOWAVE!

We have now seen the Buy Stop triggers executed for both BTC and ETH, exactly as predefined in our July TheoWave Crypto Report.

Since those triggers were activated:

ETH has rallied more than 20% above its predefined Buy Stop, while BTC has advanced more than 10% above its Buy Stop trigger — delivering another strong confirmation of the bullish Crypto roadmap.

As I mentioned yesterday, Crypto had reached a critical decision-making zone after spending several weeks in sideways consolidation. That range has now been broken, giving us the directional confirmation we were waiting for.

Another important part of the original thesis was USDT.D. I had anticipated a decline in USDT Dominance as a key confirmation for increasing bullish pressure across Crypto, and that relationship has developed in line with the broader TheoWave scenario.

Before moving into the updated BTC, ETH and USDT.D charts and the next trading roadmap, please review the July TheoWave Crypto Report first.

It is important to see how the original thesis, predefined triggers and intermarket confirmation developed before the breakout actually occurred.

Now, let’s move to the updated charts and determine what comes next.

TheoWave

Crypto Is Approaching a Decision Point

Hello, TheoWave…

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2 months ago · 9 likes · TheoWave

USDT.D:

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Hello, TheoWave!

Before moving into today’s updated trading plans, please take a moment to review the August 19 TheoWave ProService setups.

Also, make sure to review the intraday commentaries, live-session updates, and trade-management notes shared through the TheoWave Chat, as they contain important adjustments and context that developed throughout yesterday’s session.

Several market conditions evolved intraday, so understanding both the original trading plan and the subsequent live updates is important before approaching today’s setups.

For now, continue to follow the existing plans and predefined triggers unless they are specifically updated in today’s report.

Review the plan. Review the live commentary. Then move to today’s charts.

Analyze. Plan. Execute.

TheoWave

Energy Leads the Risk-Off Shift — Metals & Equities Face Another Volatility Test

HELLO, THEOWAVE…

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13 days ago · 5 likes · TheoWave

DXY & US10Y:

DXY broke below its bearish trigger, while US10Y and USOIL continued moving higher in line with their respective Main Trading Plans.

This creates a clear intermarket divergence and non-confirmation between DXY on one side and US10Y/USOIL on the other.

As I explained during the live stream, this type of divergence makes the current DXY downside move less sustainable from an intermarket perspective.

DXY is also approaching an important support area. If US10Y and USOIL remain firm above their bullish/breakout triggers, I would expect the probability of a major bullish reversal in DXY to increase significantly.

For now, stay cautious with the current Dollar weakness and continue to follow the predefined triggers.

FOREX:

Both Fiber (EURUSD) and Loonie (USDCAD) have executed their Alternative / Minor Trading Plans and delivered solid returns.

Read more

The market structure has changed.

Rather than simply extending Monday’s bearish setup, the entire options landscape has re-centered lower, placing SPX directly inside a new positioning battlefield as we approach Friday’s Monthly OpEx.

At the same time, several independent TheoWave models are beginning to converge around a potential stabilization structure, while real-time Options Flow has improved materially from Monday’s bearish configuration.

That does not mean downside risk has disappeared.

Tail-risk pricing remains elevated, dealer positioning is becoming increasingly sensitive as expiration approaches, and a confirmed break from the current equilibrium could still produce a much faster move in either direction.

The important question has therefore changed.

It is no longer simply:

“How much further can SPX fall?”

It is now:

“Is the market building a new floor before OpEx — or merely pausing before the next volatility expansion?”

In today’s report, I combine MAP/Vanna, IP, Skew, JOY, DX Surface and real-time Options Flow to identify the new SPX equilibrium, the levels that could confirm stabilization, and the boundaries that could trigger the next directional expansion.

Let’s get into the data.

TheoWave SPX Options Model

Wednesday, August 19, 2026 | 12:00 PM ET
SPX: 7731.95 | Monthly OpEx: Friday, August 21

Compared with Monday’s structure, the options landscape has shifted materially lower. SPX is now trading directly around another important positioning transition, and with only two sessions remaining before OpEx, the nearby levels deserve much more attention than the distant tails.

Read more

HELLO, THEOWAVE!

The most important theme today remains the energy situation and the evolving U.S.–Iran tensions.

With the reported 60-day window for negotiations having expired, geopolitical uncertainty remains elevated, and the risk of another escalation or renewed military action cannot be ignored. The recent sell-off in equities may partly reflect increasing risk sensitivity around these developments.

However, as always, we do not trade headlines or assumptions — we trade price, predefined triggers, and TheoWave models.

Today, the U.S. crude oil inventories report will be particularly important. I will be watching the data alongside USOIL price action to reassess the supply-demand environment and our short-term oil outlook. Given USOIL’s role in our intermarket framework, its reaction could also have implications for U.S. indices, Gold, US10Y, and broader risk sentiment.

We also have a Trump speech, which could become another significant volatility catalyst depending on the comments and any policy or geopolitical headlines that emerge.

So today could be a headline-sensitive and potentially volatile session.

Stay disciplined, follow the models, and most importantly:

Let price confirm the story before trading it.

Before moving into today’s updated charts, please review the August 17 TheoWave trading setups, as several of the predefined triggers have already been executed and delivered important directional moves.

Pay particular attention to the executed alternative scenarios, intermarket confirmations, and subsequent trade-management updates. Understanding what has already played out is essential before assessing the new triggers and today’s updated roadmap.

Review the previous plan first. Then follow the updated charts and triggers.

DXY & US10Y:

There has been no meaningful change in DXY or US10Y since the last update.

Both remain directionally unconfirmed, with price still trading between the predefined bullish and bearish triggers.

Until both markets provide synchronized confirmation by breaking their corresponding triggers, we should remain cautious and continue to follow the predefined TheoWave trading plans without anticipating the next directional move.

Read more

This report is part of the daily quantitative options research I use alongside the TheoWave ProService to understand what may be happening beneath the surface of SPX price action.

Price alone tells us where the market is.

Options positioning can help us understand what may happen when price reaches a critical level.

That distinction becomes even more important this week as we approach Monthly OpEx on Friday, August 21, when dealer positioning, Gamma exposure, hedging flows and changes in convexity can have an increasingly important influence on intraday volatility.

What Is Inside the TheoWave Options Framework?

Rather than relying on a single indicator, TheoWave combines several independent options models:

MAP / Vanna
Identifies important positioning zones around Spot and helps us evaluate where dealer hedging dynamics may become supportive or restrictive.

IP Model
Maps the evolving expected distribution of SPX and highlights potential upside and downside expansion zones across upcoming expirations.

Skew
Tracks how the market is pricing tail risk and protection, helping us understand whether investors are becoming increasingly concerned about larger future moves.

JOY
Highlights important options-positioning concentrations around Spot and helps identify potential magnets, barriers and transition areas.

DX Surface
Adds the convexity dimension — identifying where dealer hedge sensitivity may accelerate once SPX moves away from a compressed positioning zone.

TheoWave Options Flow
Provides the real-time layer through Delta, call/put positioning and flow dynamics, allowing us to compare the broader structural setup with what options traders are actually doing intraday.

Why Today’s Report Matters

Today provides a particularly useful example of why I built TheoWave as a multi-model framework.

The structural models remain broadly:

Neutral-to-Bullish

But the real-time Flow Model has turned:

Bearish / Defensive

Meanwhile, SPX is sitting directly inside the critical 7765–7780 positioning battlefield, with 7750 emerging as the important downside boundary and 7790–7800 as the key upside breakout area.

At the same time, the DX Surface suggests that the market is becoming increasingly convex away from Spot.

In simple terms:

The market may remain choppy while trapped inside the current zone — but once one side breaks decisively, the resulting move could accelerate much faster.

That is exactly the type of environment where understanding options positioning becomes extremely valuable.

This report walks through the complete MAP/Vanna, IP, Skew, JOY, DX Surface and real-time Flow framework, and then combines them into one actionable TheoWave roadmap for SPX as we enter OpEx week.

🎁 Today’s full report is completely FREE.

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Analyze. Plan. Execute.

Monday, August 17, 2026 — 1:00 PM ET
SPX: ~7769
Monthly OpEx: Friday, August 21

For this TheoWave Options Model update, I’m focusing primarily on levels close to the current market price rather than highlighting distant theoretical levels. Since we are also entering OpEx week, changes in dealer positioning and hedging flows become increasingly important as we approach Friday.

MAP / Vanna

The most important immediate zone is approximately 7765–7780, meaning SPX is currently trading directly inside a significant positioning area.

Above the market, 7780–7800 represents the first meaningful nearby concentration.

On the downside, ~7750, followed by 7735–7740, are the more relevant nearby areas.

This makes the current price region particularly important: the market is effectively sitting around a transition zone where relatively small moves could alter dealer hedging behavior.

IP Model

The IP structure becomes increasingly interesting into August 18–19.

The upper distribution gradually expands toward approximately 7800–7820, while the lower path extends toward 7730 and potentially ~7710.

Rather than indicating a clean one-directional move, the model is currently suggesting a potential expansion in the expected trading range.

Importantly, the upside distribution is also opening further above 7800 as we move deeper into the week.

Skew

All major curves are trending higher into the end of the week, with particularly noticeable increases in the Red and Cyan structures.

I interpret this primarily as an indication of increasing pricing of tail and volatility risk ahead of OpEx, rather than as a standalone bearish signal.

In other words, SPX can still advance while the options market simultaneously demands more premium for protection against larger moves.

JOY Model

The JOY structure places the current SPX price almost directly around an important positioning transition.

Below approximately 7765–7770, we can see meaningful downside positioning concentration.

Above the market, larger concentrations begin appearing further toward the 7850–8050 region.

For the immediate session, however, ~7770 should be treated as the key pivot, rather than focusing too heavily on those distant upside concentrations.

TheoWave Options Roadmap

The combined output of the models currently suggests a:

Neutral-to-Bullish structure with expanding OpEx volatility risk.

This is not yet a clean unrestricted bullish setup.

If SPX can reclaim and hold 7770–7780, the first important upside path would be toward 7800, followed by approximately 7820–7830.

Acceptance above that area could open the door for further upside extension later in OpEx week.

On the other hand, sustained trading below ~7750 would weaken the immediate structure and bring 7735–7740 into focus as the first meaningful downside magnet.

A failure of that zone could expand the downside range toward approximately 7710–7720.

Trading Scenario

For now, I consider 7765–7780 the main battlefield.

Above this zone, the positioning advantage should gradually shift toward buyers, with 7800 → 7820/7830 becoming the primary upside path.

Below 7750, the probability of a deeper OpEx-related downside expansion increases, initially toward 7735–7740, followed by 7710–7720 if selling pressure accelerates.

With August Monthly OpEx scheduled for Friday, August 21, dealer positioning, gamma exposure and hedging flows can change materially throughout the week. Therefore, the nearby levels should carry considerably more weight than distant projections, and the roadmap should be reassessed as fresh options data becomes available.

Share

TheoWave DX Surface Model — SPX

Monday, August 17, 2026 | 1:00 PM ET
SPX ~7769 | Monthly OpEx: Friday, August 21

The DX Surface adds an important layer to the previous MAP/Vanna, IP, Skew and JOY readings.

The most relevant feature is that SPX is currently positioned near the transition area of the surface, rather than sitting inside a clearly stable directional regime. Around the current spot, the surface is relatively compressed, while considerably stronger convexity develops as we move away from this region.

Near-Term Structure

The key area remains roughly 7760–7790.

The DX surface around this range is comparatively contained, which supports the idea that SPX may initially experience pinning/choppy behavior around the current zone.

However, this stability should not be interpreted as low risk.

The surface becomes substantially more nonlinear outside the immediate spot region, suggesting that once SPX escapes the current positioning zone, dealer hedge sensitivity can increase quickly.

This fits particularly well with the fact that we are entering the final days before Monthly OpEx.

Upside Structure

Above the current market, the surface gradually changes character through approximately:

7790 → 7825 → 7855

The ~7820–7855 region therefore looks more important from the DX perspective than distant upside levels.

If SPX establishes acceptance above 7790–7800, the surface suggests that hedging dynamics could become increasingly supportive of an upside extension toward 7820–7830, followed by the broader 7850–7860 area.

Downside Structure

Below spot, the first important transition remains around:

~7750 → 7730

Below that area, the surface becomes increasingly unstable/nonlinear.

This reinforces the conclusion from the previous options models that losing 7750 should not be treated as a minor event.

A sustained break below this level could increase hedge sensitivity and accelerate movement toward 7730, with ~7700–7710 becoming relevant if downside momentum persists.

OpEx Implication

The most important message from DX is therefore not necessarily directional.

It is about convexity and potential acceleration.

SPX is currently trading around a relatively compressed positioning zone, but both sides of the surface show greater instability away from spot.

This creates a classic OpEx-week environment where:

Compression around spot can be followed by a disproportionately larger move once an important positioning boundary breaks.

Combined TheoWave Options Model

Adding DX to the previous models keeps my overall assessment at:

Neutral-to-Bullish, but with increasing volatility/convexity risk into Friday’s OpEx.

The important tactical map is now:

Above 7790–7800:
Upside expansion → 7820/7830 → 7850/7860

7760–7790:
Main positioning/pinning zone → higher probability of chop and mean reversion.

Below 7750:
Structure deteriorates → 7730/7740

Below 7730:
Downside convexity increases → 7700/7710

Trading Scenario

For the immediate session, I would avoid treating movement inside 7760–7790 as strong directional confirmation.

The better signal should come from a sustained escape from this zone.

A confirmed break above 7790–7800, particularly if supported by the MAP/Vanna and JOY models, would strengthen the bullish path toward 7820–7855.

Conversely, a confirmed break below 7750 would materially increase downside risk, particularly if 7730 subsequently fails.

The key takeaway from today’s DX Surface is therefore:

SPX is still near a potential pinning zone, but the options structure is becoming increasingly convex away from spot. As we approach Friday’s Monthly OpEx, a breakout from the current 7750–7800 structure could produce a significantly faster move than the recent price action suggests.

TheoWave SPX Flow Model

Monday, August 17, 2026 | 1:00 PM ET
SPX ~7767 | Monthly OpEx: Friday, August 21

The Flow Model provides an important confirmation of the cautious message coming from the previous TheoWave Options Models.

Intraday Flow Structure

The most significant development into 1:00 PM ET is the deterioration in Delta, shown by the green line.

Delta has been trending lower through most of the session and then experienced a particularly sharp decline during the final part of the chart, reaching approximately -19.5K.

At the same time, SPX has moved down toward 7767, meaning the latest price weakness is being accompanied by increasingly negative directional option flow.

This is an important bearish intraday confirmation.

Call vs Put Value

The divergence between call and put positioning is also notable.

Call value (pink) has increased substantially and remains elevated around 86.3M, while put value (blue) is much lower at approximately 13.4M.

However, the key point is that this large call-value concentration has not translated into sustained upside price movement.

SPX is instead trading near the lower end of its recent intraday range.

That divergence deserves attention. Heavy call positioning without corresponding upside price response can indicate that the market is struggling to convert bullish options activity into actual spot appreciation.

Flow Ratio

The Flow Ratio has recovered toward approximately 1.04, putting it close to neutral.

This tells us that the broader flow balance is not showing an extreme directional imbalance by itself.

Therefore, I would give more weight to the combination of:

Falling SPX + sharply deteriorating Delta + failure of elevated call value to generate upside continuation.

That combination is currently more informative than the Flow Ratio alone.

Integration With Previous TheoWave Models

This strengthens the importance of the 7765–7780 battlefield identified by MAP/Vanna, JOY and DX.

SPX is now around 7767, almost exactly at the lower portion of that transition zone.

The Flow Model therefore gives us an important tactical warning:

The market is testing the lower boundary while Delta is deteriorating rather than improving.

This reduces the quality of an immediate bullish entry unless we see a clear reversal in flow.

Trading Scenario

For the very short term, the Flow Model is Bearish / Defensive.

As long as SPX remains below 7775–7780 while Delta continues to deteriorate, I would expect pressure toward 7750 to remain active.

A clean failure of 7750, particularly with Delta remaining deeply negative, would confirm the next downside sequence:

7750 → 7735/7740 → potentially 7710/7720

The bullish scenario is not invalidated yet.

For that scenario, I would want to see SPX reclaim 7775–7780 together with a meaningful recovery in Delta. That would significantly improve the probability of another attempt toward:

7800 → 7820/7830

TheoWave Options Conclusion

The combined picture is becoming more asymmetric:

Structural Options Models: Neutral-to-Bullish
DX Surface: Compression with rising breakout convexity
Flow Model: Short-term Bearish
Current Pivot: 7765–7780
Immediate Downside Trigger: ~7750
Bullish Confirmation: Reclaim 7780 with improving Delta

So I would not chase the structural bullish scenario at the current price.

The better approach is to allow the Flow Model to confirm it first. If Delta reverses and SPX reclaims 7780, the bullish OpEx path remains valid. If 7750 breaks while Delta remains negative, the options structure would favor a deeper downside move before the next meaningful bullish attempt.

With Friday’s Aug 21 Monthly OpEx approaching, this distinction between structural positioning and real-time flow is especially important: the medium-term options structure can remain constructive while short-term dealer flows temporarily push SPX lower.

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With TheoWave Premium, members get access to:

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Hello, TheoWave!

Geopolitical risk is intensifying again.

Israel has significantly escalated its military operations in Lebanon, putting the sustainability of the ceasefire under increasing pressure. At the same time, the U.S. continues to signal a strategy of maximum economic pressure on Iran, including the possibility of additional sanctions and tighter economic restrictions.

Together, these developments are creating a more aggressive geopolitical risk environment, which we need to monitor closely through USOIL, Gold, US10Y, DXY and VIX for intermarket confirmation.

This week is also particularly important because of OPEX, which can materially influence dealer positioning, liquidity and volatility across U.S. equity indices.

From a trading perspective, all setups and triggers defined in the Friday, August 14 TheoWave ProService report remain valid and should continue to be followed.

Please review the August 14 trading report, projected paths and commentaries before moving into today’s updated charts.

This is an environment where we should follow confirmation and predefined triggers rather than anticipate the market’s reaction to headlines.

DXY & US10Y:

The U.S. Dollar Index (DXY) and US10Y yields are currently diverging, which means we still do not have synchronized intermarket confirmation for a strong directional move.

As long as both remain below their respective bullish triggers, we should stay cautious and continue to consider the Minor Trading Plans alongside the main scenarios.

For now, the priority is simple: follow the predefined triggers and wait for DXY and US10Y to provide clearer directional confirmation before increasing conviction.

FOREX:

For Fiber (EURUSD) and Loonie (USDCAD), please continue to follow the predefined TheoWave triggers.

Read more

After successfully clearing the previous 7750–7770 resistance area, the entire actionable options structure has migrated higher with Spot. Today, multiple independent TheoWave models — including MAP, IP, JOY and DX Surface — are converging around 7790–7800, making this region the primary battleground for the remainder of the session.

But there is an important complication.

While the broader options structure remains constructive above 7775–7780, our real-time Options Flow model is not yet fully confirming the bullish picture. Intraday Delta deteriorated sharply from its morning peak and remains the key missing confirmation for another upside expansion.

This creates a particularly interesting setup:

Structural Models → Constructive
Real-Time Flow → Mixed / Defensive
7800 → Primary Decision & Regime-Transition Zone

A confirmed break above 7800 accompanied by improving Delta and controlled IV could open the next upside path toward 7820 and 7835–7840. On the other hand, another rejection from 7800 followed by a loss of 7775–7780 would increase the probability of a controlled pullback toward 7760–7750.

In this report, we combine MAP, IP, Skew, JOY, DX Surface and real-time Options Flow to determine whether 7800 becomes a Friday expiration magnet and pin — or the gateway to the next SPX expansion.

TheoWave Options Models — Friday, August 14 | 12:00 PM ET

SPX: 7785.36 | -13.63

Today’s options structure is noticeably different from Wednesday. SPX has successfully moved above the previous 7750–7770 decision zone, but it is now trading directly beneath a new near-Spot resistance/exposure cluster around 7790–7800.

Read more

HAPPY FRIDAY, THEOWAVE!

Markets have been supported by an increasingly risk-on backdrop, driven by encouraging CPI data and signs of de-escalation in U.S.–Iran tensions.

However, I don’t believe this optimism has been fully priced into the market yet.

For today, I expect some additional upside pressure across U.S. stock indices and metals, but I am not expecting a major directional trend at this stage. My preference is for relatively limited moves unless we receive stronger confirmation from our intraday models.

One of the most important pieces of information will come after the New York open, when I can assess the latest options positioning and determine whether we are operating in a Positive Gamma or Negative Gamma environment.

That distinction will be particularly important for judging whether today’s move is likely to remain controlled and mean-reverting or has the potential to develop into a more significant directional expansion.

For now, stay patient and follow the predefined TheoWave triggers rather than chasing the initial move.

Before moving into today’s updated charts, please take a moment to review the August 13 TheoWave trading setups.

Most of the covered instruments have followed the projected paths and predefined triggers with excellent accuracy, making yesterday’s report an important reference for understanding today’s updated market structure.

Review the previous roadmap first, then compare it with the updated charts to see what has already played out, what remains valid, and where the next opportunities may develop.

TheoWave

Title: PPI Day: SPX Eyes Wave 5 as Oil Weakens and Metals Prepare for a Final Push

Hello, TheoWave…

Read more

19 days ago · 5 likes · TheoWave

DXY & US10Y:

The U.S. Dollar Index (DXY) and US10Y yields remain directionless, as neither side of our predefined triggers has been activated yet.

For now, we continue to follow the main TheoWave trading plan and monitor both markets closely.

A meaningful directional signal will require DXY and US10Y to break their corresponding triggers in the same direction. Until that confirmation develops, we should expect the broader intermarket environment—particularly Forex and Metals—to remain relatively complex and choppy.

Read more

TESLA (TSLA):

Tesla has followed the trading plan and bearish scenario I shared on July 21 with remarkable accuracy. From the $380 zone, TSLA declined more than 20%, reaching the $300 area — a strong validation of our projected roadmap.

This was a solid medium-term forecast, with price action developing closely in line with the scenario outlined in the previous TheoWave report.

Before moving to the updated TSLA chart and our next trading roadmap, please review the July 21 report to understand the original structure, projected path, and reasoning behind the call.

TheoWave

Tesla Earnings: A High-Probability Trading Roadmap Before the Release

Hello TheoWave…

Read more

a month ago · 6 likes · TheoWave

TSLA — Updated Trading Roadmap

It appears that the Wave 4 correction has been completed, and TSLA may now be preparing to enter Wave 5 of the developing Ending Diagonal pattern, with an upside objective around the $500 zone.

The main Buy Trigger is $369.53. A sustained breakout above this level would significantly strengthen the bullish scenario. Additional confirmation would come from a breakout above the VWAP anchored to the December 2025 high, which represents the top of Wave 3 in our current Elliott Wave structure.

If TSLA clears both the $369.53 Buy Trigger and the anchored VWAP, it would provide stronger confirmation that Wave 5 is underway, shifting our focus toward the projected upside path and ultimately the $500 target zone.

Please follow the projected path, predefined triggers, and trading plan shown on the chart. As always, confirmation comes first—we follow the market rather than anticipate the breakout.

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Hello, TheoWave!

The U.S. administration has so far failed to force the Iranian regime to capitulate and appears to be shifting more of its pressure toward economic sanctions rather than immediate military escalation.

This could provide an important clue for a short-term correction in USOIL, which, through our intermarket framework, could potentially increase buying pressure on stock indices and metals, including Gold.

Also, pay close attention to today’s PPI data before the market open, as the release could materially affect volatility and potentially alter the intraday trading environment.

Follow the triggers, intermarket confirmations, and updated charts before initiating new positions.

Please review the August 12 TheoWave trading setups before moving to today’s updated charts.

TheoWave

CPI Day: The Triggers Are Set — Let the Market Decide

Hello, TheoWave…

Read more

20 days ago · 6 likes · TheoWave

DXY & US10Y:

The U.S. Dollar Index (DXY) and US10Y yields remain in a sideways structure, and we are still monitoring the predefined triggers for directional confirmation.

As long as DXY and US10Y fail to confirm a synchronized directional move, price action is likely to remain complex and potentially choppy, particularly across Forex and Metals.

For now, the best approach is to remain patient and follow the triggers rather than anticipate the breakout.

FOREX:

The currency market has not experienced any significant directional move, which remains consistent with the sideways behavior in DXY and US10Y yields.

For now, we continue to follow the main TheoWave trading plan and predefined triggers. Until DXY and US10Y provide clearer directional confirmation, patience remains essential, and we should avoid anticipating a move before the triggers are activated.

Read more

This report is part of the daily TheoWave SPX Options Models series, where we combine MAP/Vanna, IP, Skew, JOY, DX Surface and real-time Options Flow to understand not only where SPX may move, but more importantly, how dealer positioning, volatility and options-market mechanics could influence that move.

These reports are particularly valuable around major catalysts such as today’s CPI release, when simply looking at price action can be misleading.

And today’s post-CPI structure is especially interesting.

SPX successfully rejected yesterday’s bearish breakdown scenario and reclaimed our critical 7750 pivot. MAP has moved back into a supportive regime, JOY continues to show meaningful upside optionality, and the Flow model has registered a sharp expansion in Delta—all of which make the post-CPI structure materially more constructive than yesterday.

But there is still an important catch.

Price has not yet fully confirmed what Delta is signaling. At the same time, IP remains wide, Skew continues to price longer-dated downside protection, and the DX Surface shows that downside behavior could become increasingly nonlinear if SPX loses the current stabilization zone.

That leaves us with a very clear roadmap:

7750 Hold → Constructive
7760–7770 Break → Bullish Confirmation
7800 → 7820/7830 Expansion

while:

7730 Break → Structural Warning
7700 + IV Expansion → Convex Downside Regime

This is exactly why I built the TheoWave Options Models: not to predict every tick, but to identify the market regime, map the critical transition levels, and understand where options positioning can amplify the next move.

Enjoy today’s full report — it’s on me. Feel free to share it with other traders who may find this framework useful.

TheoWave Options Models — Wednesday, August 12 | 1:30 PM ET

Post-CPI Structure & Trading Roadmap

SPX: 7751.62 | +23.42

The post-CPI options structure has improved compared with Tuesday. SPX has recovered the critical 7750 pivot, but the models still do not show a completely clean bullish regime. The most important development is that price has moved back into the positive MAP pocket while the distribution remains wide and downside tail risk is still present.

MAP / Vanna

MAP shows a well-defined positive pocket approximately between:

7730–7760

SPX at 7751.62 is now trading in the upper half of that zone, which is materially better than yesterday when Spot was testing its lower boundary around 7730.

The immediate structure therefore favors stabilization as long as:

7740–7750 holds.

There is, however, substantial exposure concentrated immediately above Spot, particularly around:

7750–7780

with an important cluster around 7760.

This can initially act as a pinning/resistance area.

A sustained move above 7760–7770 would therefore be more meaningful than today’s simple recovery of 7750.

Above that:

7780 → 7800

becomes the next important path.

On the downside, losing 7730 would move Spot back out of the supportive MAP pocket and materially weaken the post-CPI structure.

IP Model

The post-CPI IP distribution remains wide.

For Aug 12, the immediate distribution is approximately:

Upper: 7760–7770

Lower: 7735–7740

But the distribution expands significantly into Aug 13:

Upper: ~7790

Lower: ~7700

and farther into Aug 14:

Upper: ~7820

Lower: ~7680

The important feature remains the asymmetry.

The upper tail expands toward 7820, while the lower tail reaches considerably deeper toward 7680.

Therefore, the market has absorbed CPI positively so far, but the options market has not removed downside tail risk.

Skew

Skew gives us one of the more interesting post-CPI signals.

The short-dated components initially rise into Aug 13–14, but later the Cyan, Grey and Yellow components roll over sharply.

Meanwhile, the Red component continues rising across the curve, reaching its highest reading toward Aug 18.

This suggests that the CPI event itself has passed without creating immediate downside stress, but longer-dated downside protection is still being maintained or repriced higher.

So the message is:

Near-term stress has eased

but

Tail-risk demand has not disappeared.

That prevents us from treating today’s rally as unconditional bullish confirmation.

JOY Model

JOY has also improved.

Spot at 7751.62 is now sitting directly around the transition between the lower and upper flow regimes.

Below Spot, significant positioning remains concentrated across:

7500–7700

with major spikes around the mid-7500s and 7600 region.

Above Spot, however, the yellow distribution is substantial.

Important upside concentrations appear around:

7800

7900–7950

and especially:

~8000

This gives the market considerably more upside optionality than we would expect from a purely defensive positioning structure.

So JOY is currently better characterized as:

Two-sided, but with meaningful upside participation.

Post-CPI Cross-Model Read

Putting everything together:

MAP → Improved / supportive around Spot

IP → Two-sided expansion remains

Skew → Immediate stress easing, longer-tail risk remains

JOY → Strong upside optionality exists above Spot

The key change from Tuesday is important:

The bearish scenario failed to confirm through 7730/7700, and SPX instead reclaimed our 7750 tactical pivot after CPI.

That gives the bullish scenario greater weight for the remainder of Wednesday, but we still need confirmation above the immediate overhead positioning.

TheoWave Wednesday PM / Overnight Roadmap

The key levels are now:

7730 | 7750 | 7760–7770 | 7800

Main Bullish Scenario

As long as SPX holds 7740–7750, I would maintain a constructive short-term bias.

A confirmed break above:

7760–7770

would strengthen the move and open:

7780 → 7790/7800

Above 7800, the IP structure allows an extension toward:

7810/7820

particularly into Aug 13–14.

Bearish Alternative

Failure to maintain 7750 would first put:

7740 → 7730

back into play.

The more important bearish confirmation remains a sustained break below 7730.

Then:

7730 → 7710/7700

A break below 7700 would materially change the structure again and expose:

7700 → 7680

Final TheoWave View

The post-CPI picture has improved meaningfully, but SPX is still inside the main decision area rather than in a fully confirmed bullish expansion.

My current hierarchy would be:

Above 7750 → Constructive

Above 7760–7770 → Bullish confirmation improves

Above 7800 → Upside expansion toward 7810/7820

Below 7740 → Momentum deterioration

Below 7730 → Bearish structure reactivates

Below 7700 → Downside expansion toward 7680

The key takeaway after CPI is that the market rejected the bearish breakdown scenario and recovered the 7750 pivot, while MAP has returned to a more supportive regime.

However, Skew and IP continue to tell us that downside tail risk has not been fully washed out. Therefore, 7760–7770 is now the critical confirmation zone separating a simple post-CPI rebound from a more durable bullish expansion.

TheoWave DX Surface — SPX | Wednesday, August 12 | 1:30 PM ET

Post-CPI Volatility Structure

The updated DX Surface provides an important confirmation of the post-CPI options picture. Compared with Tuesday, the immediate structure around Spot has improved, but the surface still shows clear downside convexity if SPX loses the current stabilization zone.

DX Surface Structure

The most important feature is the transition around approximately:

7735–7770

SPX is currently near 7752, placing Spot almost directly inside this transition region.

The surface around this area is relatively more stable than the lower-price region. This supports what we observed in MAP: the recovery back above 7750 has moved SPX away from the more unstable downside regime.

However, this stability remains conditional.

As price migrates lower through roughly:

7735 → 7705 → 7675

the surface steepens considerably.

That means the sensitivity of dealer positioning to simultaneous Spot and volatility changes becomes increasingly nonlinear.

In practical terms:

SPX ↓ + IV ↑ → DX curvature increases → Hedge sensitivity increases → Downside acceleration becomes more likely

Therefore, the current model is not bearish at Spot, but the risk profile deteriorates rapidly below the current zone.

Upside Structure

The upside is noticeably smoother.

Above the current transition area, the surface rises progressively through approximately:

7770 → 7800 → 7830

without showing the same degree of destabilizing curvature seen on the downside.

This is constructive.

If SPX can establish acceptance above 7760–7770, the market would migrate farther away from the unstable part of the surface.

A move through 7800 would provide another important confirmation, with 7820–7830 becoming the next volatility-regime area.

This supports the bullish roadmap derived from MAP and IP.

Post-CPI Volatility Effect

This reading is particularly important because CPI has now passed.

Before CPI, some of the curvature reflected event-volatility premium. That excuse becomes progressively less relevant after the release.

We should now watch whether implied volatility actually compresses.

The constructive combination would be:

SPX ↑ + IV ↓

This should reduce hedging stress and support stabilization or a gradual upside grind.

The dangerous combination remains:

SPX ↓ + IV ↑

especially below 7730, because the market would then move directly toward the steeper section of the DX surface.

Integration With Today’s Options Models

The complete TheoWave picture now looks increasingly coherent:

MAP: Spot has recovered into the positive 7730–7760 pocket.

IP: Near-term distribution remains two-sided, but expands toward ~7790 and ~7700 into Aug 13.

Skew: Immediate event stress has eased, but longer-dated downside protection remains elevated.

JOY: Significant upside optionality exists above Spot, particularly toward 7800–8000.

DX: Current Spot is relatively stable, but downside convexity increases rapidly below 7730/7700.

This means the post-CPI structure is constructive around Spot but still negatively asymmetric in the tails.

Updated TheoWave Roadmap

I would define the structure as:

7750 = Current Pivot

7760–7770 = Bullish Confirmation

7800 = Major Upside Test

7820–7830 = Upside Expansion

On the downside:

7730 = Structural Warning

7700 = Major Downside Trigger

7675–7680 = Downside Expansion Target

The distinction between 7730 and 7700 is important.

A move below 7730 would weaken the structure.

But a break below 7700 accompanied by expanding IV would represent something much more significant: a transition into the steeper, more convex portion of the DX surface.

Final TheoWave DX Signal

The DX model therefore upgrades the post-CPI picture from yesterday’s defensive regime toward:

Short-term: Constructive

Volatility regime around Spot: Relatively Stable

Upside convexity: Controlled

Downside tail: Still structurally more dangerous

So the critical confirmation sequence becomes:

7750 Hold → 7770 Break → 7800 → 7820/7830

while failure would progress through:

7730 Break → 7700 → 7680

The strongest bearish confirmation would not simply be SPX trading below 7730. It would be:

SPX < 7700 + IV Expansion + Increasing DX Curvature

That combination would signal that the market has transitioned from a normal pullback into a volatility-amplified downside regime.

For now, with SPX around 7752 after CPI, the model favors stabilization as long as 7730 remains protected, while 7760–7770 remains the key threshold required to confirm the next upside expansion.

TheoWave SPX Options Flow — Wednesday, August 12 | 1:30 PM ET

Post-CPI Flow Confirmation

The updated Flow model is more constructive than Tuesday’s reading and provides useful confirmation for the post-CPI recovery. SPX is near 7750.9, while Delta has expanded sharply into the afternoon. However, price has not yet followed Delta proportionally, creating an important divergence that needs confirmation.

Delta — Strongest Positive Development

The green Delta series is the standout feature.

After remaining relatively contained through most of the morning, Delta accelerated sharply after approximately 12:45 ET and is now near:

19,888

This is materially stronger than Tuesday’s late-session Delta deterioration.

More importantly, Delta continued higher even while SPX consolidated around 7750.

That creates:

Delta ↑ sharply + Price holding → Constructive underlying positioning

This can precede an upside move if Spot begins responding to the improvement in options positioning.

However, because price has not yet broken higher, I would treat this as bullish potential rather than completed confirmation.

Flow Ratio

Flow Ratio is currently around:

1.15

This is lower than Tuesday’s ~1.21 reading, but today the context is different.

Yesterday we had:

Flow Ratio elevated + Price ↓ + Delta ↓

which was defensive.

Today:

Flow Ratio ~1.15 + Price stable/recovering + Delta ↑

is substantially healthier.

Therefore, the absolute Flow Ratio reading matters less than its relationship with Price and Delta.

Put / Call Value Structure

Both BS value series underwent substantial repricing following CPI, which is expected as the market transitions out of the event-volatility regime.

The latest configuration shows a large separation between the Call and Put value structures, while Spot remains near 7750.

The critical confirmation now is whether this repricing translates into actual Spot expansion.

In other words, the derivatives structure has become more constructive, but SPX itself still needs to confirm it.

Important Divergence: Delta vs. Price

This is the key signal from this chart.

After roughly 12:45 ET:

Delta surged

while

SPX only recovered modestly and then consolidated near 7750.

There are two possible interpretations.

The constructive interpretation is that options positioning is moving ahead of Spot and SPX could subsequently catch up.

The alternative is that substantial positive Delta is being absorbed without producing meaningful price appreciation.

Therefore, the next price break becomes extremely informative.

Price ↑ + Delta remains elevated = Bullish confirmation

but:

Price ↓ while Delta rolls over = Failed bullish divergence

Cross-Model Confirmation

The full TheoWave framework now reads:

MAP: SPX has recovered into the positive 7730–7760 pocket.

IP: Upside distribution expands toward 7790 and eventually 7820.

Skew: Immediate CPI stress has eased, although longer-dated downside protection remains.

JOY: Significant upside positioning exists above Spot, especially toward 7800–8000.

DX: Current regime is relatively stable, while downside convexity increases below 7730/7700.

FLOW: Delta has expanded aggressively while Spot remains around 7750.

This makes the overall picture more constructive than yesterday.

Updated TheoWave Trading Roadmap

The key confirmation remains:

7760–7770

If SPX breaks above this area while Delta remains elevated or continues rising, the Flow model would confirm the MAP/IP bullish scenario.

The path becomes:

7770 → 7780 → 7790/7800

and above 7800:

7800 → 7820/7830

The interesting point is that Delta may already be preparing the conditions for this move, but price confirmation is still required.

On the downside, 7750 remains the immediate pivot.

Failure below:

7740 → 7730

would weaken the current signal.

If SPX loses 7730 while Delta also reverses sharply lower, today’s positive Flow development would effectively fail.

Then:

7730 → 7710/7700

returns as the primary downside path.

Final TheoWave Signal

The addition of Flow strengthens today’s post-CPI picture:

Short-term Bias: Constructive / Mildly Bullish

Delta Structure: Bullish

Price Confirmation: Still Pending

Key Bullish Trigger: 7760–7770

First Expansion Target: 7790–7800

Extended Target: 7820–7830

Immediate Failure Zone: 7740–7730

Major Bearish Trigger: 7700

The most important thing to watch now is the Price–Delta divergence.

If SPX starts moving higher while Delta remains near its current elevated level, it would provide one of the cleaner confirmations across today’s TheoWave Options Models.

If price remains unable to advance despite persistent positive Delta, however, that would indicate absorption, and I would become more cautious about chasing the upside.

For now, the combined MAP + IP + JOY + DX + Flow structure favors the buy side above 7750, but 7760–7770 remains the level that needs to break to convert constructive positioning into confirmed directional expansion.