Technical Indicator Summary Daily RSIs for the S&P 500 and Russell 2000 are in neutral territory (>30 and <70). Technical Review The March S&P 500 bounced +1.18% on Wednesday, settling @ 6829.50. Lower Bollinger band support is 6865. Upper Bollinger band resistance is 7041. 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 Price action over the last two trading sessions exhibits classic negative gamma behavior when option dealers are forced to sell weakness and buy strength in order to maintain neutral market exposure on their option books. The delta flip line is now around the 7000 strike on the March E-Mini S&P 500 futures, so more volatility is likely in the days ahead. This set-up also makes it likely that the S&P 500 prints new all-time highs sooner rather than later. Wednesday’s rally picked up steam when president Trump appeared to back off from his European tariff threats as he made it sound like a deal might soon be worked out regarding Greenland. Also in the news are reports that Japanese banks are stepping up purchases on Japanese bonds, potentially alleviating another fear in equity markets. According to the CME’s FedWatch Tool, rate markets are pricing an 5.0% probability that the Fed cuts rates by 25 bps on January 28.

Technical Indicator Summary Daily RSIs for the S&P 500 and Russell 2000 are in neutral territory (>30 and <70). Technical Review The March S&P 500 dropped -2.11% on Tuesday, settling @ 6829.50, below lower Bollinger band support at 6870. Upper Bollinger band resistance is 7039. 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 Spiking Japanese bond yields as well as the Trump administration’s dispute with European nations over Greenland were the excuses given for Tuesday’s setback in US equities. The VIX managed to close at 20.29, which is its highest level since November 24, 2025. When the VIX stays below 19, that is generally a very bullish volatility regime. If the VIX holds above 19, but below 29, then the S&P 500 will be in a volatility regime that favors choppy action. From here, if the VIX falls back below 19 in the days ahead, then Tuesday’s volatility spike will be considered a sporadic and non-trending volatility event and it will not be long before the S&P 500 prints new all-time highs. However, the majority of the MAG-7 stocks are now in bearish trends. That’s a headwind for the S&P 500, but a bigger problem for the Nasdaq 100. The bulk of earnings season is just ahead and companies that have not reported yet are not allowed to buy their stock ahead of earnings. On balance, we anticipate a strong earnings season based on a big acceleration in GDP growth at the end of 2025. According to the CME’s FedWatch Tool, rate markets are pricing an 5.0% probability that the Fed cuts rates by 25 bps on January 28.

Technical Indicator Summary The daily RSI for the S&P 500 is neutral (>30 and <70) while the Russell 2000’s daily RSI is signaling overbought (>70) conditions. Technical Review The March S&P 500 slipped fractionally on Friday, settling @ 6976.75. Lower Bollinger band support is 6863. Upper Bollinger band resistance is 7043. Option dealer gamma flipped again to negative mode as of Friday’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 Headlines around president Trump’s pick for the next Fed Chairmanship jostled equities and precious metals markets in early trading, but those headlines were just noise. Next week earnings season picks up the pace and we have every reason to expect good overall earnings results as GDP growth in recent months has been robust. US markets are closed on Monday, January 19, in observance of Martin Luther King Day. Futures will be trading for a shortened session on Monday morning. According to the CME’s FedWatch Tool, rate markets are pricing an 5.0% probability that the Fed cuts rates by 25 bps on January 28.