The tape is showing a mild bull bias this morning, and if you're still looking for a fade, you might be behind the curve. Futures are up, breadth is looking decent, and the market's gamma profile suggests some underlying support.
The Overnight Turn
SPY futures are up 0.72% from the open to now, a solid move that caught a lot of folks flat-footed. My own pre-market read missed this one badly, predicting a down day. Happens. What matters is the reaction, and right now, the reaction is to buy the dip – or rather, to buy the lack of a dip.
Gamma's Hidden Hand
One reason this move has teeth is the strong positive gamma exposure (GEX) at $+3.0 billion. For the uninitiated, GEX basically means options dealers are positioned in a way that forces them to buy more as the market goes up, and sell as it goes down. When it's strongly positive like this, it acts as a stabilizing force, or even an accelerant, on up moves. It's a feedback loop: price rises, dealers buy, price rises more. It's not a guarantee, but it's a tailwind.
Breadth Check: Who's Playing?
Looking at the megacap names, breadth is leaning positive: 14 up, 9 down, with no flat movers. This isn't a runaway train, but it's certainly not a one-stock show. When you see more than half the big players participating, it gives the move more credibility. It tells me it's not just a short squeeze in one or two names; there's broader buying conviction.
Where the Crowd Gets it Wrong
The biggest mistake right now is clinging to yesterday's narrative. The market had a different idea overnight, and if you're still looking for the bottom to fall out, you're fighting the tape. The easy money was made if you were long coming into this. Chasing it now means you're paying up, but the setup still favors continued strength, at least in the short term. The market loves to punish those who can't pivot.
What I'm Watching
I'm watching for any signs of that GEX flipping negative or breadth deteriorating. If those 14 up names start to dwindle, or if we see a significant pullback that isn't bought quickly, then the story changes. But for now, the path of least resistance looks to be higher. Don't get cute fading this until the signals shift.