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 traded in an 89.00 point range on Friday before finishing nearly unchanged @ 6850.50. Lower Bollinger band support is 6821. Upper Bollinger band resistance is 7051. Option dealer gamma remains in negative territory 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 All US markets are closed on Monday, February 16 in observance of Presidents Day. The January CPI report was a dovish surprise, coming in at +2.39%, below expectations of +2.50%. The S&P 500 struggled to bounce on the CPI report and finished virtually unchanged. With the Nasdaq 100 now in a bearish trend and systematic strategies in risk-off mode, the S&P 500’s path of least resistance in coming weeks appears to be pointed lower. In a separate note, the Supreme Court announced that they would issue their decision on the legality of a portion of the Trump Tariffs on Friday, February 20. Expectations have been for a while that the high court would rule against the Trump administration. On one hand, if the Trump administration loses, there are potentially bullish implications for stocks. On the other hand, even if they lose, the Trump administration will likely shift their position and use other statutes to impose the same tariffs. It’s a complicated potential series of events that have unclear market implications. According to the CME’s FedWatch Tool, rate markets are now pricing a 28.5% probability that the Fed cuts rates by the April 29 FOMC meeting (the last FOMC meeting of the Jerome Powell era). There is also an FOMC meeting on March 18 where odds of a rate cut are now 9.8%

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 -1.56% on Thursday, settling @ 6851.00. Lower Bollinger band support is 6833. Upper Bollinger band resistance is 7051. Option dealer gamma remains in negative territory 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 Coming into Thursday, estimates suggest a -1.5% drop in the S&P 500 would generate approximately $15 billion in selling from vol control strategies alone. CTA strategies were likely sellers on Thursday and option dealers were most certainly sellers given their negative gamma set-up. This is the market structure fragility that we have been talking about for a few days that increased the likelihood of downside risk. The Nasdaq 100 broke key support on Thursday and that adds to our bearish near-term outlook as US markets signal that they are shifting from a goldilocks in January/February to a potentially mixed to bearish March. On Friday we get the January CPI report. We think any bounce on Friday after the January CPI report is an opportunity to de-risk and/or add bearish strategies. According to the CME’s FedWatch Tool, rate markets are now pricing a 26.9% probability that the Fed cuts rates by the April 29 FOMC meeting (the last FOMC meeting of the Jerome Powell era). There is also an FOMC meeting on March 18 where odds of a rate cut are now 7.8%.

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 finished fractionally lower on Wednesday, settling @ 6960.50. Lower Bollinger band support is 6847. Upper Bollinger band resistance is 7051. According to Tier1 Alpha, option dealer gamma remains in negative territory 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 If the S&P 500 moves lower from here, option dealers, vol control funds and CTAs could all be selling at the same time. On the other hand, if bulls can push the S&P 500 higher from here, downside risks can still be avoided. The Nasdaq 100 is threatening a trend breakdown. With the S&P 500 in a structurally weak position and the Nasdaq 100 on the precipice of breaking trend to the downside, we look for increasing volatility in the weeks ahead. Wednesday’s jobs report came in stronger than expected, which is incrementally hawkish. Yesterday rate cut odds for March 18 were 21.6%, after the jobs report March 18 rate cut odds are 7.0%. On Friday we get the January CPI report. According to the CME’s FedWatch Tool, rate markets are now pricing a 21.4% probability that the Fed cuts rates by the April 29 FOMC meeting (the last FOMC meeting of the Jerome Powell era). There is also an FOMC meeting on March 18 where odds of a rate cut are now 7.0%.