The S&P 500 is facing a challenging trading session as investors grapple with a mix of market signals. A notable increase in put buying after 11 am in New York indicates a bearish sentiment, with expectations of further declines. This sentiment is further influenced by a significant drop in Nvidia's stock, which has fallen around 16%, adding psychological pressure on the broader index. Systematic strategies and ETFs are also contributing to the selling pressure, potentially intensifying the downward momentum. Despite these headwinds, the market is showing signs of resilience, with the 6,000 level on the S&P 500 emerging as a critical point due to substantial open interest and neutral gamma effects that help stabilize prices through dealer hedging activity.
The Direxion Daily S&P 500 Bull 2X Shares (SPUU) has experienced a decline, dropping 3.34% to $153.14 as of 1:00 PM on Monday, January 27.