Max pain is a crude approximation: it is skewed by including many contracts at strike prices that are outside the range of possible end-of-week SP finishes. For example, the $1 puts that show up in the 10s of thousands on big expiry dates aren't serious puts: they are created to lower the margin requirements for OTM calls, and thus are evidence of an underlying BULLISH position (
not advice - ask a Pro).
The fight is for $700 because (yesterday) there were 13,570 open Put contracts at that strike. If the SP were to finish below $700 on Friday, then MMs would have to pay out the difference in cash to the holders of all those options. Further, there were 13,275 Call contracts, so MMs can't let it go too far above that price either, or they pay for that.
This is the what my experimental "C-P analysis" (Call - Put) tries to capture. It's simple, fast, and fairly robust in the absence of market-moving news (or FUD/Bare raids).
More data will come out at 07:00 ET on Friday morning (last OI update for 08/27 expiries).
Cheers!