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I’m watching something on the charts right now that’s completely changed how I’m thinking about position sizing and strike selection over the next few weeks.
And I want to discuss the technical level that’s driving my approach. Unless we’re looking at a massive bull trap — and I don’t believe we are — we’re going to participate in this market but we’re going to be smart about how we do it.
Here’s what caught my attention: There’s a gap fill sitting around 6,625 on the S&P 500, which represents roughly a 5% correction from current levels. The gap fill at 6,625 is now my reference point for strike selection, credit quality and position sizing going forward.
That level gives me a clear framework for how I want to approach new trades and where I see the best risk-reward shaping up.
What makes this even more compelling is the JPMorgan collar trade at 7,000 from end of quarter. Once that level broke to the upside, it shifted from resistance into a structural floor created by hedging flows, and that influences how I expect price to behave on any pullback.
Why This Technical Setup Matters for Positioning
I want to participate in this move but I’m not rushing to build positions with 10% buffers when I can be more strategic. If the market pulls back to fill that gap around 6,625, I’d be far more comfortable positioning strikes in that 6,600 zone or lower where I could collect $1.00 to $1.25 in credit instead of the 60 to 65 cents available at current levels.
I’m respecting the gap at 6,625, which means I might take a fresh trade rather than adding at current levels with strikes at 6,750. The goal is not to chase the market at a mediocre level when a more favorable setup may be forming just below.
This isn’t just about improving credit — it’s about building trades in areas where price has a higher probability of stabilizing. The combination of the gap and the institutional activity around 7,000 suggests that a pullback into this zone could act as the beginning of a reset before the next move higher.
How I’m Adjusting My Approach
I’m looking at all my moving averages, and price could pull back into this area before finding support. It might not pull back that far — but if it does, could the market come down to these moving averages, fill the gap and then bounce back up?
Absolutely.
If the market brings me that opportunity, I’ll be ready to position more aggressively. If it doesn’t, I’m still participating with current positions that have a 5% to 6% buffer built in. The key is aligning my strategy with the levels that matter rather than reacting emotionally to each candle.
The gap at 6,625 is now the anchor for how I’m approaching strike selection, credit targets and overall position sizing in the days ahead. Respecting that level gives me structure, patience and better trades — and that’s ultimately what I want.
I’ll see you in the markets.
Chris Pulver
Chris Pulver TradingÂ
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