Finanshuse: Vi er endnu ikke ude af skoven, trods minirally onsdag

Uddrag fra finanshuse:

The squeeze ran out of steam right where it needed to. What looked like a potential breakout quickly turned into a clean rejection at key technical levels, with both SPX and NASDAQ failing at resistance. At the same time, volatility has cooled from panic levels but remains elevated enough to keep pressure on the market. Add in weak liquidity and destabilising flows, and this starts to look less like a healthy bounce and more like a fragile setup where downside can grind, or even accelerate, from here.

SPX reversed cleanly near the upper end of the steep trend channel  coming close to the 21-day during yesterday’s squeeze. Headline risk remains elevated, but trading the channel has worked well over the past few weeks.

Near-perfect reversal in the NASDAQ after testing the upper end of the trend channel and the 21-day MA. Former range lows are now major resistance, and the same applies to the SPX.

The initial VIX shock from early March has faded, especially relative to where SPX is trading. The key point: VIX at 27 into a long weekend signals stress, but not panic. Markets can still grind lower from here without volatility needing to rise much further.

Europe remains the global sucker, and the Iran war has exposed European risks again. The V2X keeps that “distance” to VIX.

Dealers are now short roughly ~$7bn of S&P gamma, the second most negative reading on record. In this regime, they sell low and buy high, amplifying volatility.

Relatively low liquidity means even modest-sized orders can have an outsized impact on price. This is often overlooked, leading to frustration as traders struggle to get the fills they expect.

This looks like a failed squeeze into resistance, and with dealers short gamma and liquidity thin, moves can accelerate quickly from here. If that plays out, yesterday’s put spread setup comes into focus, and rolling protection lower becomes key.