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 added +0.38% on Friday, settling @ 7691.25. Hedgeye’s risk range for the Sept. futures contract coming into Thursday’s session was 7856 at the top and 7631 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 Friday’s session near 15.13. Option dealer gamma flipped to back to positive mode 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 The S&P 500 bounced off of the bottom of its Hedgeye risk range on Friday and flipped option dealer gamma back into positive mode. It is no surprise that the VIX remains in the investible bucket (<19). Looking ahead to next week, key data points include NVDA earnings report (expected after Wednesday’s closing bell). NVDA’s earnings rarely disappoint and their CEO is a world class stock promoter. On Thursday and Friday we hear from Fed officials at their Jackson Hole conference. Based on US Treasury actions this week, markets will be listening closely for any sign of which way the Fed is leaning in terms of quantitative easing. Chairman Warsh has historically spoken out against quantitative easing policies. However, the huge rally we’re seeing in the gold (and the related breakdown in the US Dollar Index) may be front-running a more dovish Fed. The only thing that would surprise us next week is if Fed Chairman Warsh is hawkish. Erik and Mike discuss the gold market on August 20, watch here → https://cf.altavest.com/goldreplay If the Fed sends dovish signals in Jackson Hole, look for the S&P 500 to make new all-time highs into month-end. But that may only be the beginning of a larger rally into the mid-term elections. September and October are bullish months in terms of Hedgeye’s monthly Quad forecast, so all the bears who recently predicted doom for stocks may have a rough couple of months ahead. We are sympathetic to the bear case for the S&P 500 and Nasdaq 100, but the Quads suggest the time to get bearish is early 2027. According to the CME’s FedWatch Tool, rate markets are pricing a 54.7% chance that the Fed hikes rates by the October 28, 2026 FOMC meeting.

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 -0.86% on Thursday, settling @ 7662.50. Hedgeye’s risk range for the Sept. futures contract coming into Thursday’s session was 7836 at the top and 7673 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 16.01. Option dealer gamma flipped to negative mode as of Thursday’s close. Recall that 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 VIX remains in the investible bucket (<19), but the bull case for the S&P 500 weakened on Thursday as option dealer gamma flipped slightly negative. That means that the S&P 500 no longer has dealer buying on dips to mitigate downside risk. In fact, if the S&P 500 drops from here, option dealers will sell into that weakness which would execerbate any downside. The S&P 500, Nasdaq 100 and Russell 2000 indices all finished at the bottoms of their respective Hedgeye risk ranges on Thursday. Friday is the monthly options expiration and roughly $2.8 trillion in notional S&P 500 options are set to expire or be rolled. In terms of high open interest strikes, it is a bit of a no-mans land between 7600 and 7800. So in terms of pinning targets, there is nothing close to Thursday’s close, 7662.50. Looking ahead to next week, key data points include NVDA earnings report (expected after Wednesday’s closing bell). On Thursday and Friday we hear from Fed officials at their Jackson Hole conference. Based on US Treasury actions this week, markets will be listening closely for any sign of which way the Fed is leaning in terms of quantitative easing. Chairman Warsh has historically spoken out against quantitative easing policies. According to the CME’s FedWatch Tool, rate markets are pricing a 66.3% 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 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%.