Market opened trading session 08/24 in a fairly over-extended zone after yesterday's strong rally, pushing mega-cap tech almost straight through key gamma levels at SPX~4400 and QQQ~370 right before NVDA ER. NVDA's surprise revenue and earnings growth report boosted the market after hours and in last night's futures session, helping almost the entire tech sector open gap up early morning before selling pressure across the board pushed QQQ to break support continuously in the first 2 hours.
Selling pressure started from take profit demand after NVDA earnings and de-risk ahead of Jackson Hole press conference, gradually pushing the market deep into negative gamma as short-dated put options sensitive to gamma returned to profitable zones, forcing market makers to sell off and reverse hedge, leading to panic and increasing volatility, amplifying the impact of newly bought puts during the day.
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