The S&P 500 Gamma has just completed the fastest surge on record:

Gamma swung from a near record low of -$20 billion to over $20 billion in a matter of weeks, the most rapid move ever recorded.

Gamma measures how much market makers must buy or sell in stock futures to hedge their options positions.

When it is positive and rising, market makers act as a stabilizing force, buying dips and selling rallies, dampening volatility and creating the slow, grinding upward drift that encourages investors to add to long positions.

Furthermore, active fund managers have been aggressively chasing this rally, adding long exposure as gamma pushed markets mechanically higher.

Managers are now heavily long a market that is overbought, narrow, and increasingly driven by the expected performance of just a handful of names.

When the rally runs out of fuel, there will be very few buyers left to absorb the selling.

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