Technical Indicator Summary Daily RSIs for the S&P 500 and Russell 2000 are in neutral territory (>30 and <70). Technical Review The September S&P 500 slipped -0.46% on Monday, settling @ 7768.75. Hedgeye’s risk range for the Sept. futures contract coming into Monday’s session was 7843 at the top and 7691 at the bottom (red lines on the chart above). For the S&P 500, there are three volatility regimes: 1) the bullish investible bucket (VIX < 19), 2) the chop bucket, (VIX = > 19 and < 29), and 3) the bearish F-bucket (VIX > 29). The VIX finished Monday’s session near 15.24. According to Tier1 Alpha, option dealer gamma remains in POSITIVE territory as of Monday’s close. Recall that when option dealer gamma is positive, option dealers mechanically BUY weakness and SELL strength to hedge their exposure. Positive gamma for option dealers increases the odds of LOWER realized volatility and SMALLER percentage moves up or down from one day to the next. Market Outlook Rising energy prices was as good an excuse as any for the the S&P 500 to pull back from the top its Hedgeye risk range on Monday. Nevertheless, the VIX remains in the (bullish) investible bucket (<19) and option dealer gamma remains positive which creates ideal conditions for a low volatility rally to the upside. Inflation readings are benign and not a reason for the Fed to hike rates. Systematic flows from Vol Control funds and CTAs are inactive in current market conditions with CTAs already near their max long positioning. A catalyst (higher realized volatility) for systemic strategies to sell their long equity position is missing. According to the CME’s FedWatch Tool, rate markets are pricing a 68.3% chance that the Fed hikes rates by the December 9, 2026 FOMC meeting. The odds of a rate hike by the October 28 FOMC meeting are now < 50%.

Technical Indicator Summary Daily RSIs for the S&P 500 and Russell 2000 are in neutral territory (>30 and <70). Technical Review The September S&P 500 dropped -0.22% on Friday, settling @ 7805.00. Hedgeye’s risk range for the Sept. futures contract coming into Friday’s session was 7884 at the top and 7629 at the bottom (red lines on the chart above). The VIX finished Friday’s session near 14.31. Option dealer gamma remains in POSITIVE territory as of Friday’s close. Recall that when option dealer gamma is positive, option dealers mechanically BUY weakness and SELL strength to hedge their exposure. Positive gamma for option dealers increases the odds of LOWER realized volatility and SMALLER percentage moves up or down from one day to the next. Market Outlook Despite the S&P 500 finishing in the red on Friday, the VIX closed lower as well. All signs continue to point higher across the board. The last thing you want to be over the next two to three months is bearish on US equities. The VIX remains in the (bullish) investible bucket (<19) and option dealer gamma remains positive which creates ideal conditions for a low volatility rally to the upside. Inflation readings are benign and not a reason for the Fed to hike rates. Systematic flows from Vol Control funds and CTAs are inactive in current market conditions with CTAs already near their max long positioning. A catalyst (higher realized volatility) for systemic strategies to sell their long equity position is missing. NVDA reports earnings on August 26. If you think NVDA’s questionable accounting practices might be a catalyst for a market crash, you might be right, but you may also be 6 months early. Despite all of the bearish naratives, maintain a bullish bias for now and be prepared to buy dips. If the signals change, we will change. According to the CME’s FedWatch Tool, rate markets are pricing a 67.3% chance that the Fed hikes rates by the December 9, 2026 FOMC meeting. The odds of a rate hike by the October 28 FOMC meeting are now < 50%.

Technical Indicator Summary Daily RSIs for the S&P 500 and Russell 2000 are in neutral territory (>30 and <70). Technical Review The September S&P 500 gained +0.67% on Thursday, settling @ 7822.50. Hedgeye’s risk range for the Sept. futures contract coming into Thursday’s session was 7905 at the top and 7597 at the bottom (red lines on the chart above). For the S&P 500, there are three volatility regimes: 1) the bullish investible bucket (VIX < 19), 2) the chop bucket, (VIX = > 19 and < 29), and 3) the bearish F-bucket (VIX > 29). The VIX finished Thursday’s session near 14.65. Option dealer gamma remains in POSITIVE territory as of Thursday’s close. Recall that when option dealer gamma is positive, option dealers mechanically BUY weakness and SELL strength to hedge their exposure. Positive gamma for option dealers increases the odds of LOWER realized volatility and SMALLER percentage moves up or down from one day to the next. Market Outlook The S&P 500 and Russell 2000 printed new all-time highs on Thursday. All signs continue to point higher across the board as equity markets appear to be front-running bullish conditions in September and October. The last thing you want to be over the next two to three months is bearish on US equities. The VIX remains in the (bullish) investible bucket (<19) and option dealer gamma remains positive which creates ideal conditions for a low volatility rally to the upside. Inflation readings are benign and not a reason for the Fed to hike rates. Systematic flows from Vol Control funds and CTAs are inactive in current market conditions with CTAs already near their max long positioning. A catalyst for systemic strategies to sell their long equity position is missing at the moment. NVDA reports earnings on August 26. If you think NVDA might be a catalyst for a market crash, you might be right, but you may be 6 months early. Markets are currently signaling higher from here at least through the mid-term elections. According to the CME’s FedWatch Tool, rate markets are pricing a 66.4% chance that the Fed hikes rates by the December 9, 2026 FOMC meeting. The odds of a rate hike by the October 28 FOMC meeting are now < 50%.