Market 07/03: Liquidity decreases before the holiday, index under pressure at call wall

Market continues melt-up in the last trading session of the first half of 2023 with SPY +1.18% and QQQ +1.54%. VIX pushed to bottom below 13 before spiking at the end of the session, closing the day in green, pulling the entire equities block along before the closing bell, clearly showing most traders not confident holding positions over 3.5-day weekend holiday. SPX breakout from call wall at level 4400 right from the start of the day and closed at quite neutral level ~4450 while QQQ rejected at call wall 370.

Accordingly, market breadth continued to improve and ended Q2 with quite bullish signals. Notably, the stock market will close early today (07/03) at 1pm ET and fully close tomorrow for Independence Day 4th July.

Moving to today, with most of the market standing aside from trading, low liquidity environment is quite understandable. With SPX call wall moved up to 4500 after last week's OpEx, 4400 level gamma flip will be the “risk-off” signal for SPX.

In other news, Tesla announces Q2 vehicle delivery data exceeding all expectations, despite suspicions of declining demand for three consecutive months. Specifically, Tesla delivered 466,140 vehicles higher than the forecasted 448,351 with production of 479,700 vehicles exceeding the target of 456,617.

With inventory continuing to increase for the 5th consecutive quarter, many analysts believe Tesla will continue price cut strategy to stimulate demand. Tesla up 6% pre-market, erasing doubts from last week's downgrades from Morgan Stanley and Goldman Sachs.