With the choppiness we’ve been navigating lately, we might finally be seeing the groundwork laid for a mild uptrend as we head toward year-end.
The levels we’re holding are stabilizing, but it’s crucial to keep expectations tempered. Unlike the explosive moves we saw at the beginning of the year, the coming months may only give us incremental gains — the type that demand careful strategy.
If we look at where we are now, the market hasn’t shown the strength to break above key levels like $585 in the S&P 500 ETF (SPY). And, while that ceiling might seem within reach, it’s likely we’ll need a stronger catalyst to breach it.
What’s more, with the upcoming elections, uncertainty continues to weigh on the market — making a runaway rally unlikely until that cloud clears. Still, with the support of the 20-day EMA and a subtle lean toward bullish gamma levels, we might just be setting up for a slow but steady climb.
Now, it’s also worth watching the gamma structure.
The shift to a positive gamma suggests there’s a lean toward slight bullishness in the short term. If we manage to break that 585 mark, there’s a chance to test higher levels like 590, but these moves will likely play out in small increments.
The gamma pockets we’re seeing — particularly around 580 to 585 — could still act as a brake, keeping movements restrained. For now, those barriers might help maintain a grind higher without opening the floodgates.
For those of us who prefer to trade actively, this environment is one where the patience game pays off. We’re likely looking at mild upswings and some back-and-forth action rather than a straightforward trajectory upward.
With major events ahead, like the election, we’re in a space where markets are unwilling to commit fully in either direction. Essentially, we’re in a “hold your ground” mode with potential for modest gains as long as support levels remain intact.
In terms of sectors, I’d look for relative strength plays, especially in names that weather these back-and-forth days well. Utilities (XLU), defense stocks, and certain tech giants like Apple (AAPL) and Microsoft (MSFT) have managed to hold up despite the recent volatility.
These are the kinds of plays that will likely lead if we see any true continuation into a mild uptrend.
If we keep the right levels in focus and remain disciplined, there’s definitely opportunity here. But remember, it’s unlikely we’ll see the high-energy upswings that marked early 2024.
For now, the market appears comfortable with a more restrained pace. Let’s keep an eye on key levels, avoid overextending on any one move, and see if this potential uptrend can indeed carry us to year-end.
Kane Shieh
Kane Shieh Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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Stated results are from hypothetical options applied to real published trades from 10/30/23 – 10/21/24. The result was a 95.75% win rate on 259 trades, an average return of 12.3% including winners and losers and average hold time of less than 24 hours. Performance is not indicative of future results. Trade at your own risk and never risk more than you can afford to lose.
