OANDA:SPX500USD   S&P 500 Index
The SPX lost 0.7% today with growth stocks (-1.5%) and especially mega cap growth titles (-1.8%) hit hard, due to a strong rise in 10-year treasury yields (+14 bps ).

The higher rates can be traced back to the lockdown in Shenzhen, a major technology hub, due to another virus outbreak, which is feeding into inflation /rate-hike expectations, as the supply chains are in danger of getting seriously damaged again, and for the first time ever the fed funds future markets are now pricing in 7 rate hikes for the year on a end-of-day basis (see last chart).

Another major development came out of Russia, where premier Mishustin signed a directive prohibiting grain exports until June 30th and sugar exports until August 31st, which will surely lead to more pain in european supermarkets/ECB skyscraper in Frankfurt.

Also concerning was a report saying the US has told allies that China signalled its willingness to provide military assistance to Russia to support its invasion of Ukraine. The cables, which were sent to allies in Europe and Asia, did not clarify whether China had signalled help in the future or if it had already started providing military support to Moscow.

Total gamma is now at about -899MM and 4100 points are now again a real possibility from here. Should the SPX break below, then a sudden drop towards 4000 should be expected, as this level will develop into the "mother of all gamma strikes" as we move lower, due to the high concentration of open interest there.

Below 4000 however, dealer demand for shorts should level out quickly all else equal, which could help to stabilize markets/send them sharply higher from there in an extreme scenario.



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