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1. Higher-for-longer rates & restrictive policy cause something to break before the Fed is willing to cut
2. Recession finally arrives
3. Optimistic equity volatility finally recouples higher to elevated macro uncertainty & still-stressed rates volatility
SPX has basically traded in the 4520/4580 range since mid November. Long gamma dealers have been "choking on theta" for the past weeks.
The AAII bull - bear spread has exploded to the upside. We haven't seen such a big jump in the spread in a very long time. We have reversed on much smaller moves of the spread at previous occasions...
The VVIX squeeze we outlined last week continues. The gap vs VIX is huge. Last time the VVIX was here, VIX was at 19 ish...
Despite all the excitement, both ways, the DXY is trading without a trend, stuck in a range since last November.