Market opens Tuesday's trading session in a positive gamma environment with dealers continuing to cover shorts quite clearly with VIX pushed strongly below 15 right from the opening. The NASDAQ block, mainly mega cap tech stocks, is where capital flows are strongest attracted in the morning before retail also starts participating in this shorts-cover rally. As mentioned in yesterday's recap, the 4400-4500 region of SPX is quite "open", allowing SPX to move almost in a straight line throughout the morning.
Today although organic buy volume has appeared clearly on the market, this rally mostly still comes from “extreme positions” with too many shorts from before Jackson Hole crushed by the decline in volatility. Above 4400, the market continues to maintain bullish bias with most hedges concentrated on the 09/22 OpEx week - promising volatility will return.
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