Cracking the 0DTE Code, Part 2: The 6 Pre‑Market Trading Regimes
Updated: Aug 18, 2025 · Read Part 1
Intro
In Part 1, we showed why static (“naive”) gamma maps are great for pre‑market terrain but weak for intraday timing—and how live customer/market‑maker (MM) delta positioning sharpens 0DTE entries. In Part 2, we add a second lens: pre‑market structure on SPY. By classifying the open into six regimes, we can attach unconditional and conditional probabilities to the day’s key level interactions. (Note: this applies to SPY; SPX doesn’t trade pre‑market.)
Key Levels & Notation
- PMH = Pre‑Market High
- PML = Pre‑Market Low
- YDH = Yesterday’s High
- YDL = Yesterday’s Low
The Six Pre‑Market Regimes
| Regime | Definition | Typical Tendency |
|---|---|---|
| 1) Inside Yesterday’s Range | YDL ≤ PML ≤ PMH ≤ YDH — pre‑market fully inside yesterday’s range. |
Lower‑volatility; mean‑reverting sessions common. |
| 2) Full Gap Above | YDH < PML ≤ PMH — full gap above yesterday’s high. |
Breakaway potential; high odds of a backtest first. |
| 3) Full Gap Below | PMH < YDL — full gap below yesterday’s low. |
Bearish skew; frequent retests of breakdown area. |
| 4) Top Overhang (poke above) | PMH > YDH, PML ≥ YDL — prior session poked above and held support. |
Short‑trap dynamics; often fuels continuation higher. |
| 5) Bottom Overhang (poke below) | PML < YDL, PMH ≤ YDH — prior session poked below and recovered. |
Long‑trap dynamics; often sets up reversal rallies. |
| 6) Spans Both Sides (Wide PM) | PML < YDL and PMH > YDH — exceeded both extremes. |
Expansion regime; typically high intraday volatility. |
The Probabilities Framework
Once the regime is known, frame the day with two sets of stats:
Unconditional probabilities
- Close crosses above/below PMH/PML?
- Tags/breaks of YDH/YDL?
Conditional probabilities (examples)
P(YDH | ↑PMH close)P(YDL | ↑PMH close)P(YDL | ↓PML close)P(YDH | ↓PML close)P(PMH | ↑YDH close)P(PML | ↓YDL close)P(PMH | ↓YDL close)P(PML | ↓YDH close)P(PMH | ↑YDL close)P(PML | ↑YDL close)
P(YDH | ↑PMH close) = Probability that YDH is tagged/broken given a candle close above PMH. Any timeframe works; I prefer 5‑minute for balance of accuracy and hit rate. Not all conditionals apply in every regime based on opening location.
Putting It Together with 0DTE Flow
Pair regime probabilities with live customer/MM delta positioning (from CBOE open‑close 10‑min data) to build a two‑factor playbook:
- Inside range: Fade extremes; favor mean reversion.
- Full gaps: Look for backtests before continuation.
- Overhangs: Watch for failed pokes to reverse, or continuation traps to spring.
- Wide spans: Expect multiple high‑volatility setups.
For 0DTE traders, this framework provides a structured edge to narrow the focus from "infinite possibilities" to six probabilistic scenarios, each with measurable odds. It encourages inaction during chop, trading only during ideal setups.
Confirmation tip: wait for a close beyond your level; if a subsequent candle closes back across against your bias, consider exiting. Always respect theta. If trading futures, obviously you can avoid this, which is an advantage.
Closing Thoughts
Traders often say “it’s a game of probabilities,” but rarely quantify them. The six SPY pre‑market regimes give a measurable framework. Combined with MM positioning, you get a repeatable two‑factor edge:
- What is our daily bias, and what are the odds of key level interactions? (regime)
- How are MMs positioned right now? (exposure)
Join the Community & Get the Tool
If this was useful, hop into the free Foxchase Trading Discord for daily setups, regime probabilities, and discussion. The raw probability tables are pinned there for free if you’d rather build your own tool.
TradingView SPY Regimes Indicator — Put this framework to work instantly: