Last week the tape split hard by index. The Nasdaq led to the downside, sliding about 4.6 percent and stringing together five straight losing sessions as money rotated out of large-cap technology and chip names. The trigger was a global tech selloff tied to mounting worries about the cost of AI data-center buildouts, alongside a report that OpenAI may push its IPO into next year. The S&P 500 followed the tech weakness lower, off roughly 2 percent on the week. The Dow went the other way and finished higher, up about 0.6 percent, as the bid moved into more defensive corners of the market.
That is a clean rotation story. The same names that led the market higher through the spring did the heaviest lifting on the way down, while the rate-sensitive, value-heavy Dow caught the bid that left tech. The split shows up in the structure too. Last week every index was in positive gamma above its flip. This week only the Dow still is. The Nasdaq and the S&P have both slipped below their flips into negative gamma, which is the structural confirmation that the rotation is real, not noise.
Where the Regime Stands Now
The board is split. The Dow is the lone index still in positive gamma, holding above its 51,289 flip, where dealer hedging dampens volatility and leans against both sharp drops and sharp rips. The S&P and the Nasdaq have dropped below their flips into negative gamma, where the same dealers do the opposite: they sell into weakness and chase strength, which amplifies moves in both directions. The two lines that flip the math back are the S&P at 7,454.83 and the Nasdaq at 29,156. A daily close back above those reclaims the cushion. Until then, the S&P and the Nasdaq are in the regime that makes selloffs run.
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The CFTC Traders in Financial Futures report refreshed to the June 23 snapshot, and the positioning tells a more constructive story than the price action did. Asset managers are net long all three indexes. They are deeply long the S&P 500, where leveraged funds covered roughly 122,000 short contracts on the week, the biggest single shift in the set. Layer on the NAAIM Exposure Index, which jumped to 98.59 for the week of June 24 from 92.83, a second straight push to near fully invested. Active managers were still leaning into risk even as technology sold off.
What This Means This Week
The positioning and the price are pointing different ways, and that is the tension to watch. Asset managers stayed net long all three indexes and leveraged funds covered an enormous block of S&P shorts into the weakness, while the NAAIM index sits near fully invested at 98.59. Strong hands leaned long into a tech selloff. That can be resilience, or it can be the setup for a flush if Thursday's jobs data disappoints. The Nasdaq is the one place positioning matches the tape: asset managers trimmed and leveraged funds rebuilt their short. Lean on price structure where positioning and price disagree.
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 split this week. The Dow is the only index still in positive gamma, holding above its 51,289 flip and the calmest of the three by vol. The S&P slipped below its 7,454.83 flip into negative gamma, with the 7,400 put wall now the line that holds or breaks. The Nasdaq is just under its 29,156 flip, also in negative gamma, and it carries by far the highest vol rank of the three at 91. In negative gamma, dealer hedging stops cushioning and starts amplifying, so the two reclaim lines, 7,454.83 on the S&P and 29,156 on the Nasdaq, are the most important levels on the board.
What This Means This Week
One regime split three ways. The Dow is still positive gamma, where dealers buy dips and sell rips and dampen the range. The S&P and the Nasdaq are now below their flips in negative gamma, where the same dealers amplify moves instead of fading them. That is the backdrop that lets a selloff feed on itself. The levels that matter are the reclaim lines: 7,454.83 on the S&P and 29,156 on the Nasdaq. Get back above them on a daily close and the cushion returns. Stay below and any down catalyst, a soft jobs print for instance, has a clear runway. The Dow is the relative-strength hold.
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. End-of-day data, June 26, 2026. IV Rank per Barchart index/ETF options data. Use as structural context, not a trade signal.
Volatility Read
Volatility firmed but did not panic. The VIX closed at 18.41, up into the tech selloff yet still a long way from a crisis reading. The real story is dispersion. The Nasdaq volatility index, the VXN, sits near 31 while the Dow's VXD is down around 16. That gap is the widest tell on the board: the options market is calm on the Dow and pricing heavy uncertainty into tech. A 4.6 percent Nasdaq week against a green Dow week means the headline index vol understates how much is moving underneath. The fear is concentrated, not broad, and it is concentrated exactly where the selloff is.
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 four-day, holiday-shortened week with the calendar back-loaded. U.S. markets are closed Friday, July 3, for Independence Day, and the June jobs report is pulled forward to Thursday. That concentrates the week's risk into Wednesday and Thursday.
Monday Jun 29: No major scheduled releases. The first trading day of the new quarter, with the S&P and Nasdaq opening below their flips in negative gamma. Watch 7,454.83 and 29,156 as the reclaim lines.
Tuesday Jun 30: Conference Board Consumer Confidence and Chicago PMI, with month-end and quarter-end rebalancing flows in play.
Wednesday Jul 1: The data stacks up. ISM Manufacturing PMI and JOLTS Job Openings at 10:00 AM ET, with ADP Employment ahead of the open. The first real read on activity and labor for the new month, all in one session.
Thursday Jul 2: The heavy session. The June Employment Situation, nonfarm payrolls, the unemployment rate, and average hourly earnings, lands at 8:30 AM ET, pulled forward from Friday, alongside weekly Jobless Claims. This is the print that confirms or challenges the resilience active managers are positioned for, and it hits a thin, pre-holiday tape. Friday Jul 3: U.S. equity markets closed.
The Short Version
The week is back-loaded into Wednesday and Thursday. Wednesday stacks ISM Manufacturing, JOLTS, and ADP, and Thursday delivers the jobs report into thinner pre-holiday liquidity. Thin tape plus the month's biggest labor print can move price farther than the headline deserves, and with the S&P and Nasdaq in negative gamma, a down surprise has a clear runway lower. Trade the reclaim levels, respect the thin liquidity, and let Thursday set the tone.
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The whole week sat in one split. The Dow finished green while the Nasdaq broke down five sessions in a row. That is not the market breaking, that is the market rotating. The money that led on the way up, large-cap tech, did the heaviest selling, and it moved into the slower, value-heavy corners the Dow is built on. The reason I read structure at the instrument level is exactly this. A weak Nasdaq and a firm Dow are two separate trade decisions, not one market call. When you stop treating the indexes as one thing, weeks like this stop being confusing and start being tradable.
What changed this week is the gamma map. Last week all three indexes were in positive gamma, the dealer mechanic that cushions selloffs. This week only the Dow still is. The S&P and the Nasdaq dropped below their flips into negative gamma, where dealers amplify moves instead of fading them. The lines I am watching are the reclaims, 7,454.83 on the S&P and 29,156 on the Nasdaq, into a jobs report that got pulled forward to Thursday in a four-day week. The weekend headlines out of the Middle East, an escalation and then a quick ceasefire that the tape mostly shrugged off, are a live reminder that in negative gamma a gap runs. On my own account that means patience over chasing a thin tape into the print, framed to my account, not as a rule for yours.
JT Smith
Founder | Steady Edge Trading
steadyedgetrading.com
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Active managers pushed exposure to near fully invested while the Nasdaq logged five straight down days into negative gamma. Conviction, or complacency right before Thursday's jobs print?
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