After closing above the important call wall 4500 yesterday, SPX immediately gapped down in the morning, losing the important level. Most of the morning de-risk activity came from tech stocks that had been pushed up quickly in the past 2 months due to call gamma flow now expiring.
Panic began to spread across the market after about the first hour of trading when investors realized the severity of the strike protest by the 3 largest US automakers. Energy and consumer stocks began to face strong pressure, leading to volatility rising in the morning, followed by strong put hedge demand lasting until this afternoon.
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