Last week the tape repaired. After the prior week’s tech-led selloff, all three indexes turned higher and climbed back above their gamma flips. The Dow led the whole way and closed Thursday at a record 52,900, up nearly two percent on the week, with the biggest push on the June jobs report. The S&P 500 recovered about 1.8 percent to 7,483, and the Nasdaq 100 clawed back roughly 1.1 percent to reclaim its 29,156 flip. Friday was the Independence Day holiday, so the week ran Monday through Thursday.
The June jobs report was the pivot. Payrolls rose just 57,000, well under the 115,000 the market expected, prior months were revised lower, and the unemployment rate dipped to 4.2 percent. In plain English, hiring cooled sharply. In a cycle where the Fed has been leaning toward more hikes, a soft labor print eases that pressure, and the rate-sensitive corners of the market caught the biggest bid. The rotation that ran to the Dow the week before ran there again, but this time the rest of the tape came along.
Where the Regime Stands Now
The board healed. All three indexes are back in positive gamma above their flips, where dealer hedging leans against big moves and keeps ranges contained. The Dow is deepest in positive territory and at a record. The S&P sits just above its 7,435 flip, pinned near 7,500 where its put wall and call wall meet. The Nasdaq reclaimed its 29,286 flip but still carries the highest vol rank of the three, so it is the least settled of the recoveries. The three flips, 51,614 on the Dow, 7,435 on the S&P, and 29,286 on the Nasdaq, are the lines that keep the cushion in place.
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The CFTC Traders in Financial Futures report was delayed by the holiday, so the latest snapshot is still June 23. It reads constructive: asset managers are net long all three indexes and deeply long the S&P 500, where leveraged funds had covered roughly 122,000 short contracts into the selloff. The fresher June 30 print releases Monday afternoon. What did move is sentiment. The NAAIM Exposure Index, which tracks how invested active managers are, fell to 84.69 for the week of July 1 from 98.59, so the pros trimmed from near fully invested even as the indexes climbed back. Positioning was long into the selloff, and some strong hands took chips off into the recovery.
What This Means This Week
Positioning and sentiment are pulling apart, and that is the tension to watch. The June 23 snapshot still shows asset managers net long all three and leveraged funds having covered a huge block of S&P shorts. But the NAAIM index dropped from near fully invested to the mid-80s as price recovered, which says active managers sold some of the bounce. That is not a bearish signal on its own, it is a de-risk. The fresh June 30 COT lands Monday and will show whether the fast money chased the recovery or faded it. Until then, lean on price structure: all three are back above their flips, and that is the tape telling you the repair is real.
Source: CFTC.gov TFF Futures Only. NAAIM Exposure Index from NAAIM.org. Data as of prior Tuesday, released Friday 3:30 PM ET. Four-day lag applies. COT and NAAIM are sentiment context tools, not trade signals.
Options dealers are required to hedge their exposure as price moves. The size and direction of that hedging obligation creates mechanical support and resistance levels that are independent of fundamentals. The regime healed this week. All three indexes reclaimed their gamma flips and sit back in positive gamma, where dealer hedging dampens moves instead of amplifying them. The Dow is the strongest, at a record and pressing its 53,000 call wall. The S&P reclaimed its 7,435.08 flip and is pinned between a put wall and a call wall that both sit at 7,500. The Nasdaq reclaimed its 29,285.57 flip but still carries by far the highest vol rank of the three at 71, with the 29,690 call wall just overhead. The three flips are now the downside triggers: hold them and the cushion stays, lose one and that index drops back into the regime that lets selloffs run.
What This Means This Week
One regime, all three constructive. Every index is back above its flip in positive gamma, where dealers buy dips and sell rips and lean against big moves in both directions. That is a calmer, mean-reverting backdrop than last week’s split. The levels that matter now are the flips as the downside triggers: 7,435 on the S&P, 29,286 on the Nasdaq, and 51,614 on the Dow. Hold them and the cushion stays in place. Lose one on a daily close and that index falls back into the regime that lets selloffs feed on themselves. The Nasdaq is the one to respect: it reclaimed, but its vol rank is still the highest on the board.
Source: Barchart.com. SPX index page (S&P 500), IUXX Nasdaq 100 page (Nasdaq), DIA ETF page (Dow); Dow gamma levels shown as DIA × 100 in DJIA index points. Latest end-of-day data, July 6, 2026. IV Rank per Barchart index/ETF options data. Use as structural context, not a trade signal.
Volatility Read
Volatility drained back out as the tape recovered. The VIX closed near 16.6, a calm reading. The tell is still dispersion, just narrower than last week. The Nasdaq’s vol rank sits at 71, far above the S&P at 14 and the Dow at 15. In plain English, the options market is pricing far bigger swings in tech than in the rest of the tape, even after the reclaim. The fear drained out of the Dow and the S&P but is still parked over the Nasdaq. That is the one place a clean move can still turn violent, and it is why the Nasdaq is the cautious leg of an otherwise constructive board.
VIX measures implied volatility on the S&P 500. VXN measures the Nasdaq. VXD measures the Dow and is the most direct read for MYM traders. Under 15 = compressed, low fear. 15-20 = normal. 20-30 = elevated caution. Over 30 = fear or crisis mode. Elevated volatility widens spreads and increases intraday range. Use as a session awareness tool.
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This is a light, back-loaded week that reopens after the holiday. The one event that matters is Wednesday’s FOMC minutes. A delayed positioning report lands Monday, and the rest of the calendar is quiet.
Monday Jul 6: Markets reopen after the Independence Day close. The delayed CFTC Commitments of Traders report, carrying June 30 positioning, releases in the afternoon, the first fresh read on how the fast money positioned through the selloff and the recovery.
Tuesday Jul 7: No major scheduled releases. Consumer Credit after the close.
Wednesday Jul 8: The week’s main event. The minutes from the June FOMC meeting, the first under new Chair Kevin Warsh, release at 2:00 PM ET. With CPI still hot near 4.2 percent year over year and the June jobs report having cooled, the minutes are the market’s best look at whether the committee is still leaning toward another hike this year.
Thursday Jul 9: Weekly Jobless Claims at 8:30 AM ET, otherwise quiet. Friday Jul 10: No major scheduled releases, with Q2 earnings season set to ramp the following week.
The Short Version
The week is quiet until Wednesday, and the FOMC minutes are the swing factor. A hawkish tone that keeps a 2026 hike on the table pressures the reclaim; a softer read gives it room to run. With all three indexes back in positive gamma, the base case is a calmer, range-bound tape into the minutes. Watch the flips as the downside triggers, respect the Nasdaq’s higher vol, and let Wednesday set the direction.
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Last week was the rotation, this week is the reclaim. Five sessions ago the Nasdaq was broken below its flip and the Dow was carrying the tape alone. Now all three are back in positive gamma and the Dow just printed a record. That is a real repair, not a dead-cat bounce, and the jobs report is why: a soft payroll number took some heat off the Fed and the whole tape exhaled. When the structure flips back to positive across the board, the character of the market changes with it, and I trade the calmer, mean-reverting version differently than the negative-gamma one.
Two things keep me from getting comfortable. The Nasdaq reclaimed its flip, but its vol rank is still the highest on the board by a mile, so that is where a surprise still bites hardest. And the pros trimmed: NAAIM fell from near fully invested to the mid-80s even as price recovered, which tells me some strong hands sold the bounce. The line I am watching is the Nasdaq’s 29,286 flip into Wednesday’s FOMC minutes. Hold it and the recovery has legs. Lose it and last week’s regime is right back. On my own account that means respecting the reclaim without chasing it, framed to my account, not as a rule for yours. JT
JT Smith
Founder | Steady Edge Trading
steadyedgetrading.com
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This Week's Question
Active managers cut exposure from near fully invested at 98.59 to 84.69 even as all three indexes climbed back above their gamma flips. Prudent profit-taking, or are the pros fading a recovery the tape does not believe in?
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