Technical Indicator Summary Daily RSIs for the S&P 500 and Russell 2000 are neutral (>30 and <70). Technical Review The December S&P 500 ended Thursday’s wild session down -1.56%, settling @ 6557.50, below lower Bollinger band support is 6601. Upper Bollinger band resistance is 6998. Option dealer gamma remains in negative mode as of Thursday’s close. When option dealer gamma is negative, option dealers mechanically sell weakness and buy strength to hedge their exposure. Negative gamma for option dealers increases the odds of HIGHER realized volatility and LARGER percentage moves up or down from one day to the next. Market Outlook NVDA’s earnings shocked investors on Wednesday afternoon, coming in well above consensus expectations. Futures ripped higher overnight in anticipation of a strong rally on Thursday. Prior to NVDA’s earnings headlines, traders had aggressively purchased S&P 500 put options to hedge against the possibility of disappointing results from NVDA. Wednesday’s put buying bid up short-term calendar volatility to 32 on Wednesday. So, when NVDA blew away earnings expectations, the mechanical reaction is for those holding long puts is to immediately sell the puts since the insurance is presumed to be no longer necessary. On the other side of the put trade, option dealers who sold the puts to investors had delta hedged those option positions with short S&P 500 futures positions. So when the option dealers buy back the puts, they also buy the back the short futures hedge. That is part of the reason why the S&P 500 added to its overnight rally in the first hour of trading on Thursday. This means that all of those hedges purchased on Wednesday were likely liquidated by the time the S&P 500 started dropping from Thursday’s session high! But here is the part that most people miss. Systematic flow risk from CTAs and vol control funds are currently in risk off mode. Tier1 Alpha points out on X that spikes in realized volatility, whether due to a large percentage drop or large percentage rally, can be equally destabilizing. Here is an excerpt from the research note we received from Tier1 Alpha ahead of Thursday’s trading session. “While the bulls may get some temporary relief from the recent choppiness, it is worth remembering that upside volatility is still volatility and can be destabilizing for systematic strategies that rely on risk as a rebalance metric. Assuming Nvidia can muster the strength to drag the index higher today, it remains to be seen whether it will be enough to cause a material shift in trend as volatility control funds and CTA's remain at high risk of deleveraging. Remember, these strategies represent a subset of the market that is fully non-discretionary, meaning Nvidia's fundamentals have zero input on the model. As long as volatility continues to rise, these funds will be forced to sell.” CTA positioning could remain a stiff headwind for equities in coming weeks. It also appears that the S&P 500 broke its bullish trend as of Thursday’s close. Trend for the SPX was around 6565 and the SPX settled at 6538. The last time that the SPX broke its bullish trend it dropped 20% to the April 2025 low. We are not predicting a 20% drop now, but the likelihood that the S&P 500 and Nasdaq 100 move lower from Thursday’s close is high. According to the CME’s FedWatch Tool, there is a 39.6% probability that the Fed cuts rates by 25 bps on December 10.

Technical Indicator Summary Daily RSIs for the S&P 500 and Russell 2000 are neutral (>30 and <70). Technical Review The December S&P 500 bounced +0.33% on Wednesday, settling @ 6661.50. Lower Bollinger band support is 6645. Upper Bollinger band resistance is 6975. Option dealer gamma remains in negative mode as of Wednesday’s close. When option dealer gamma is negative, option dealers mechanically sell weakness and buy strength to hedge their exposure. Negative gamma for option dealers increases the odds of HIGHER realized volatility and LARGER percentage moves up or down from one day to the next. Market Outlook US equities remain vulnerable to the downside. Here are some of the bearish developments that have our attention. • The upper end of resistance for the S&P 500 (and Nasdaq 100) continues to signal a lower high. That is a mathematical way of saying that the S&P 500 is losing its bullish momentum. • Macro conditions are conducive for a correction. It should be noted that all of Q1 2026 is shaping up as bullish from a global macro perspective. So, a December correction could be the launch-pad for a rally in early 2026. • The odds of a December rate cut fell to 33.6% on Wednesday after the Fed released its minutes report from the last meeting. • Systematic flow risk is currently bearish. This means that CTAs and vol control strategies are close to triggering a mechanical unwind of their long US equity positions. If this sell trigger happens while option dealers are in negative gamma, the potential is there for simultaneous selling from CTAs, vol control strategies and option dealers. CTAs are currently sitting on their largest long US equity exposure since the pandemic. • NVDA reports earnings after Wednesday’s close. 177 is a key trend level where a close < 177 would likely lead to a larger correction in NVDA and the broader market as a whole. According to the CME’s FedWatch Tool, there is a 33.6% probability that the Fed cuts rates by 25 bps on December 10.

Technical Indicator Summary Daily RSIs for the S&P 500 and Russell 2000 are neutral (>30 and <70). Technical Review The December S&P 500 lost -0.78% on Tuesday, settling @ 6639.75, below lower Bollinger band support @ 6657. Upper Bollinger band resistance is 6970. Option dealer gamma remains in negative mode as of Tuesday’s close. When option dealer gamma is negative, option dealers mechanically sell weakness and buy strength to hedge their exposure. Negative gamma for option dealers increases the odds of HIGHER realized volatility and LARGER percentage moves up or down from one day to the next. Market Outlook US equities remain vulnerable to the downside. Here are some of the bearish developments that have our attention. • For the first time in months, the S&P 500 (and Nasdaq 100) are signaling a lower high. That is a mathematical way of saying that the S&P 500 is losing its bullish momentum. • For December, global macro indicators are suggesting negative price action. It is a warning that macro conditions are conducive for a correction. However, Q1 2026 is shaping up for a recovery. So, a December correction could be the launch-pad for a rally in early 2026. • The odds of a December rate cut have fallen below 50% after last week’s hawkish comments from multiple Fed officials. • Systematic flow risk is currently bearish. This means that CTAs and vol control strategies are close to triggering a mechanical unwind of their long US equity positions. If this sell trigger happens while option dealers are in negative gamma, the potential is there for simultaneous selling from CTAs, vol control strategies and option dealers. CTAs are currently sitting on their largest long US equity exposure since the pandemic. • NVDA reports earnings after Wednesday’s close. If NVDA does not rally after its earnings, watch out below. According to the CME’s FedWatch Tool, there is a 48.9% probability that the Fed cuts rates by 25 bps on December 10.