Stocks defied expectations by finishing higher, obliterating the 2b top pattern foreseen the previous day. The upward movement was dubious, primarily driven by gains in a low-volume, low-liquidity overnight session.

When regular trading resumed, the market’s progress was meager, with only a 13 basis point advance. The session seemed lackluster in comparison to the exuberance of the overnight surge.

Meanwhile, the QYLD options underwent a significant sell-off, with the 19,450 strike price calls bought back, causing a dramatic increase in notional value from $4 billion to $8 billion practically overnight.

The anomalous nature of the market movements between night and day trading sessions is notable, with 2.14% gains on minimal contracts overnight compared to marginal rise despite higher volumes the following day.

In a surprising turn of events, the QYLD ETF is slated to undertake a massive $5 billion options sell-off, potentially commencing around midday, prompting a cautious approach from futures market participants.

Amidst these developments, the ongoing steepening of the yield curve is a cause for concern, with a notable uptick of five basis points to roughly 14 basis points.

Historically, a steepening yield curve has spelled trouble for the Nasdaq 100, contrasting with the period of a flat or inverted curve during the dawn of the AI revolution in May 2023 that saw the index rise.

The emergence of a gap pattern in the S&P 500 suggests underlying weakness, indicating that yesterday’s rally may lack staying power and potentially leading to the filling of the gap in the near future.

Moreover, today marks the much-anticipated quarterly OPEX, where the fate of holders of 5,600 calls hangs in the balance, after experiencing a surge in value from $42.70 to over $100.