Zomma & vomma risk as a response to macro, Weekly post (19-23/May)

We have a lot of Fed speakers and PMI (thursday) and VIX expo this coming week.
May OpEx was supportive, and for me this still seems topish. Even more.
My reversion model shows 77.94% probability for a reversal towards 5518.31 (lvl that stil wouldn’t be trendchanging, but would confirm bullish trend and build the structure for a longer time frame; like monthly), closer to my target of 80%+.

I would still maintain day by day approach, and take longer dated short once the reversion model goes above 80%.
Q3 looks very bearish to me.
Before I delve into fundamental explaination, let me share you something very important:
coded rolling SPX/VIX beta

As you can see, since May 5, the beta has spiked. The key is the sudden steep spike, not the current beta value itself.
Remember, what SPX did on those days? - There were two days, were SPX corrected back a bit. Then it suddenly was saved by gov speakers, and squeezed up more.
The beta is still negative, but went longer (jargon for ‘more positive’/’less negative’). So, on that SPX pullback VIX still went down, but when SPX started to rally, the VIX decline started to slow down in an accelerating manner.
This happens when the whole smirk gets bid, including the tails too.

Now, this, considering the very cheap IV relative to RV, tells me that short vol trade is oversold. And not simply oversold, but aggresively. Market reached a point, where there start to be liquidity problems to the upside, and this is important bcs during this aggressive vol selling, the market accumulated significant zomma and vomma risk…