SPY just faded 25 points off the high — but it happened inside +$659M of positive gamma. That's the key. Last week, the same afternoon move would've been 50-60 points in -$1.4B negative gamma. The shock absorber is back on. The fade is dampened, not cascading.
This isn't a structural break. It's orderly distribution inside a gamma cushion. When dealers are long gamma, they sell into rips and buy dips — that smooths volatility. The 25-point pullback is what you'd expect when the market is no longer skating on thin ice.
Context matters more than the headline move. Positive GEX means the tape can digest selling without amplifying it. If we were still in negative gamma, this same fade would've triggered stop-loss cascades and dealer hedging that magnified the move. We're not there.
This is a normal, gamma-dampened pullback. Not a big deal. $SPY
This isn't a structural break. It's orderly distribution inside a gamma cushion. When dealers are long gamma, they sell into rips and buy dips — that smooths volatility. The 25-point pullback is what you'd expect when the market is no longer skating on thin ice.
Context matters more than the headline move. Positive GEX means the tape can digest selling without amplifying it. If we were still in negative gamma, this same fade would've triggered stop-loss cascades and dealer hedging that magnified the move. We're not there.
This is a normal, gamma-dampened pullback. Not a big deal. $SPY
