There's no memory up here.

For roughly a hundred trading sessions this market lived in the same range. May, June, July, into the front of August. Every bit of that open interest piled up down there.

When price trades inside that pile, it keeps getting dragged back to it, because that's where the risk lives.

Then we squeezed above it and left all of it behind.

Watch how it works. That ball of risk carries negative delta as price climbs, and the trading firms have to offset it with positive delta to balance the equation. So they buy S&P futures and they buy Nasdaq futures, and they buy them like it's going out of style.

They buy into buying and they sell into selling. That's the dynamic of the beast.

The problem is what comes after. Once you clear the pile, that risk is mitigated and everybody's happy, but there's almost no contract size up here in the new territory.

Nothing substantiates the move. And what you get instead is a tape that reads like this.

We're okay. We're not okay. We're okay. We're not okay.

There's no footing. This is exactly where technical traders get ripped apart.

You've got people staring at their MACDs and their Fibonaccis and their Bollinger Bands, not realizing the market is about to hand them their own backside. They don't get what drives price on an intraday basis, and right now the answer is zero DTE order flow. Not a moving average.

You want to see what no risk to anchor against looks like? Somebody buys 20,000 puts in the SPX and the whole thing goes into a tailspin. Somebody buys 20,000 calls and it flips 15 points the other way.

That isn't volatility. That's erratic, and erratic feels completely different when you're sitting in front of it.

Volume tells you the same story. Contract counts have been light and the biggest names in this market haven't traded anything close to their usual size. When there's nothing behind a move, the move means nothing.

So here's how you keep your head attached to your shoulders in a tape like this.

Let the market make a few moves before you do anything. Don't take rash short-duration positions into trade you can't read.

And if you can't tell me where the S&P is going to be twenty minutes from now, no way in hell should you be sizing up. That isn't a failure of analysis, that's the correct read of a tape with nothing in it.

Hands off the mouse until the order flow tells you something.

One more thing, and it matters more today than it did last month.

If you're holding options into a tape this disconnected, know what a stop-loss is. It's an instruction to sell at the next available price. A gap or an air pocket blows straight through it, and it fails on exactly the day you needed it.

Protection that holds is built into the position before you enter, not bolted on after.

I put that on paper along with the rest of my pre-trade rules. Grab it, run it, and stop giving the market a free shot at your account.

===>SEND ME THE PRE-TRADE CARD

To your success,

Don Kaufman