THE WEEK AHEAD ECONOMIC DATA RELEASE 1ST FEB 2026 US NFP JAN’26 PREVIEW SILVER THE PATTERN 1980-2011-2026 REPEATS AGAIN KEVIN WARSH: THE CHAIR OWNS THE ROOM THE WEEK AHEAD ECONOMIC DATA RELEASE 25TH JAN 2026 JPY Now Likely to See Joint Japan US Intervention Trump’s Marginal Utility of Tariff Threats is Rapidly Decreasing FED JAN’26 MEETING PREVIEW
Macrospectrum
Subscribe icon
Equities

The Equity Melt Up

ADMIN || 23rd January 2026

The melt-up is back with US equities trading like the Greenland tariff escalation never happened. Both the S&P 500 and VIX are near levels from a week ago, re-anchored in the previous year-to-date ranges.

The narrative that economic growth is re-accelerating is providing the impetus. The Russell 2000 at new all-time highs and beating the S&P 500 is a clear reflection of that as are cyclical plays like regional banks, short-cycle industrials and materials outperforming. At the same time, the AI bid is rotating upstream again, toward the chip and power-plumbers rather than the hyperscalers. These moves all indicate pricing for growth and earnings follow-through not just leaning on the idea of easier Fed policy.

Option positioning also helps explain the price action. The S&P 500 has reverted to a positive gamma backdrop, which tends to pin the benchmark in a range as dealer hedging flows decelerate moves in and out of the zone unless a real shock occurs. With markets calming and Wednesday’s January VIX expiration removing upside VIX call positioning, reducing gamma-squeeze risks, front end implied vol has dropped sharply. That creates vega tailwinds, as dealers reduce hedges, creating incremental buying flows.

Spot Gamma also highlights that traders look happy to sell vol into the Jan. 28 FOMC meeting, but they’re not seeing excess risk-taking beyond that. The vibe then is the proverbial “rising tide lifts all boats” in the near term. Any convincing move back below the 6,800 area on the S&P 500, however, risks the return of a less supportive gamma backdrop that typically accelerates any drawdown.

Legal Disclaimer:

Trading foreign exchange/commodities/equities/bonds on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange/commodities/equities you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange/commodities/equities trading and seek advice from an independent financial advisor if you have any doubts.

Read More