Technical Indicator Summary The S&P 500’s daily RSI remains in oversold territory (< 30) while the Russell 2000’s daily RSI remains in neutral territory (>30 and <70). Technical Review The June S&P 500 slipped -0.37% on Monday, settling @ 6388.25. The VIX finished the Friday at 31.31. Option dealer gamma remains deeply negative as of Monday’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. Systematic vol control funds are set to sell down their long S&P 500 equity exposure as 30-day realized volatility continues to trend higher. CTAs are nearing max short exposure. Market Outlook In the very short-term, the S&P 500 could mount some consolidation (at the very least), as its daily RSI is less than 30 for the second day in a row. This suggests that another bear market bounce may be just around the corner. Can bulls manufacture a bounce into the end of the quarter? We hope they do as we are prepared to fade the next bounce. According to the CME’s FedWatch Tool, rate markets are pricing a 2.6% probability that the Fed RAISES rates at its April 29 FOMC meeting (the last FOMC meeting of the Jerome Powell era). Rate markets are saying there is a zero chance of a rate cut on April 29.

Technical Indicator Summary Daily RSIs for the S&P 500 and Russell 2000 are in neutral territory (>30 and <70). Technical Review The June S&P 500 sank -1.74% on Thursday, settling @ 6525.00. The VIX finished the day at 27.44. 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 No change from yesterday. The trend remains pointed lower for the S&P 500, Nasdaq 100 and Russell 2000; and the macro outlook for the next two quarters is for stagflation, Regardless of what happens next in the Middle East, the set-up remains bearish and we continue to look for opportunities to fade rallies. According to the CME’s FedWatch Tool, rate markets are pricing a 6.2% probability that the Fed RAISES rates at its April 29 FOMC meeting (the last FOMC meeting of the Jerome Powell era). Rate markets are saying there is a zero chance of a rate cut on April 29.

Technical Indicator Summary Daily RSIs for the S&P 500 and Russell 2000 are in neutral territory (>30 and <70). Technical Review The June S&P 500 bounced 0.53% on Wednesday, settling @ 6640.75. 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 The trend remains pointed lower for the S&P 500, Nasdaq 100 and Russell 2000; according to some research the macro outlook for the next two quarters is for stagflation, Regardless of what happens next in the Middle East, the set-up remains bearish and we continue to look for opportunities to fade rallies. According to the CME’s FedWatch Tool, rate markets are pricing a 4.1% probability that the Fed RAISES rates at its April 29 FOMC meeting (the last FOMC meeting of the Jerome Powell era). Rate markets are saying there is a zero chance of a rate cut on April 29.