OANDA:SPX500USD   S&P 500 Index
The SPX recovered from an early decline on Wednesday and ended the day with a marginal loss of 0.1 percent.

Growth (unchanged) was outperforming value (-0.3%) the third session in a row, while energy (-4%) was the laggard among sectors.

The yield on 10-year Treasury Notes declined 13 basis points, while the yield on 2-year papers declined 15 basis points, which helped the yield curve to recover for the second session in a row.

Fed chair Powell appeared today on Capitol Hill to explain himself and according to the Wall Street Journal never mentioned a soft landing and instead only referred to it as a goal when he was asked about it. Powell in general scaled back expectations notably and is no longer ruling out certain scenarios.

“The events of the last few months around the world have made it more difficult for us to achieve what we want.”

This was a notable change from his prior stance when he visited the Congress after the Invasion, but markets answered with a bounce off of 3700.

In brief, the stock market had ample reasons to sell aggressively into yesterday's strength but didn't, and that is the best thing that can be said about today’s session.

On the other hand, the SPX was again not able to get a foot in the door and establish a presence above 3800, so we still remain in a state of uncertainty.

Dealer gamma remained largely unchanged at -763MM, while the most prominent gamma strikes remained at 3700 with -59MM of gamma attached and 3800 with an amount of -43MM.

Volume was reduced today, but June is nevertheless on track to become another record breaking month, which will most likely set a new all-time high (chart not included).

Option activity is wild at the moment and gamma flows will therefore be in our opinion crucial in the months to come, especially when we move into late summer/fall and activity picks up again, as there is no other way to fully grasp the erratic market behavior.


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