If it feels to you like US equities are having a tough time realizing that big downside move that committed bearish strategists operating mostly within a fundamentals-based framework still insist is just around the corner, it’s not your imagination.

On Tuesday, I spent a few minutes recapping the post-SVB vol-selling regime, as expounded on so many occasions by Nomura’s Charlie McElligott, who described the conditions that precipitated a “non-stop index-level vol crush.”

He mentioned the big jump in AUM for yield-enhancement ETF strategies along with “persistent vol supply” from vol risk premium-harvesting, overwriters and underwriters which, together with upgraded soft landing odds and the perception that the emergency response to SVB signaled no appetite at the Fed for systemic risk, led to a “smooth glide path” for various manifestations of vol selling.

With that in mind, dealers are currently “stuffed” long gamma, which is helping to pin spot equities or, more simply, insulating the market from bigger swings.

The chart is from Tuesday and the spot reference was 4530 on the S&P.

Under these conditions, “it’s difficult for broad Index to move unless we break below 4400 or above 4600,” McElligott said.

Below or above those thresholds, dealer hedging could act as an accelerant for directional moves. But you need a catalyst to shove spot down (or up) through those levels.

Meanwhile, the laggard in the short vol space this year remains call sellers. “The market has continued to melt-higher and take out short strikes from calls sold to generate premium,” Charlie went on. “This overwriter stop-in has been an ongoing theme which contribute[d] to the market rally over the past six months.”