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It was a rough day for stocks, with the S&P 500 finishing lower by about 1%. It was the second time this week the index has fallen by more than 1%. Once again, the index rebounded off its midday lows before giving way in the final 30 minutes of trading.

Interestingly, over the past two sessions, I’ve observed that the market-on-close imbalance for the New York Stock Exchange, typically released at 3:50 p.m. Eastern, has been small. But today, after 3:55 p.m., when the NASDAQ imbalance was released, it swelled to about $2.5 billion in sell orders. That suggests much of the heavy selling continues to be driven by the mega-cap tech names—and potentially that CTAs have turned into sellers at these levels.

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The S&P now finds itself in a negative gamma regime, and for today at least, the put wall at 6,700 helped support the market at that lower level. In fact, the index hit a low of 6,709 on the day, suggesting that the 6,700 put wall was clearly in play—likely contributing to the midday rally as some puts were closed out.

The question now is where the put wall will be tomorrow. If the 6,700 level has been largely exhausted, the next put wall could shift lower, possibly toward 6,500. We’ll have to wait until the morning to confirm.

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The index closed below its 20-day moving average today and slipped under support at 6,750. This now sets up the next key level of support at 6,665, which coincides with the 50-day moving average. A break below that level would open the door for a move back toward the 6,500 area.

Momentum has also clearly weakened. The RSI is breaking lower, and with the lower Bollinger Band near 6,560, there isn’t much technical support to keep the market steady if it starts to drift and falls below the 50-day moving average.

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It turns out that Oracle’s (ORCL) 36% surge back in September was peak Stupidity. The entire gain is now gone.

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The only thing that may turn out to be worse than the Oracle move was SoftBank’s (SFTBY) near-400 % move from the April low to the October high.

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Meanwhile, IV in SoftBank is still pushing the mid-70% range.GAMMA – SQUEEZE

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Finally, liquidity did not improve much this past week. Reserve balances at the Fed still sit below $2.9 trillion. Liquidity shall remain tight for some time to come.

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The good news is that next week will only see $37 billion in Treasury settlements, with another $27 billion on Monday, the 17th.

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