SPX futures appear to be range-bound between the 200-day Moving Average at 4454.58 and the daily mid-Cycle resistance at 4478.53, awaiting the FOMC minutes to give rate guidance. Today’s expiring options show the Max Pain zone at 4465.00 with options turning negative at 4450.00 and positive at 4500.00. This dealer-driven pain management exercise is due to failure at some point, although it is possible that the market may stay flat through Friday’s options expiration.
The Cycles Model shows 8.6 days of a probable 17.2-day decline have elapsed. A potential Master Cycle low may be due the first week of March, followed by an attempt to “rescue” the quarter. However, the FOMC conducts its meeting in March , ending on the 16th. This may be a very choppy quarter.
ZeroHedge reports, “The global rally stalled on Wednesday, and U.S. index futures were flat, treading water after a quiet overnight session, ahead of today’s FOMC minutes which some hope will unveil more detail on the Fed’s upcoming rate hike and QT, while also weighing the risks from the Ukraine tensions against inflation and tighter monetary policy. S&P 500 futures were flat and Nasdaq futures were little changed by 7:15 a.m. in New York, trimming earlier gains after NATO Sec. Stoltenberg pushed back on claims of Russian troop withdrawals, adding he is yet to see signs of a de-escalation. Treasury yields, bitcoin, gold and the dollar were also all flat. Oil recovered after the biggest one-day loss this year as worries about potential disruptions to commodity supplies eased.”
VIX futures are positive, but inside yesterday’s trading range. It is possible that yesterday’s 50% retracement is sufficient to spark another probe at the Head & Shoulders neckline.
The NYSE Hi-Lo Index closed at -147.00 yesterday.
ZeroHedge reports at 8:56 am, “Once again the algos are watching every word on Russia and this morning its SecState Blinken’s turn to trigger the swings:
*BLINKEN: NO EVIDENCE OF RUSSIA PULLBACK
And that sent stocks downb…
…and bond yields…
TNX pulled back this morning, with the likelihood of retesting the Cycle Top at 18.90 in the next few days. Trending strength may reappear in the latter half of next week with a probable Master Cycle high at or near the end of the month.
ZeroHedge reports, “After December’s gravely disappointing drop in retail sales, analysts are convinced January will see all that pent-up demand come flying back and expected a 2.0% MoM jump (despite a collapse in consumer confidence, especially buying attitudes and financial well-being expectations). In fact the analysts under-appreciated the rebound as headline retail sales exploded a stunning 3.8% MoM
That is the biggest MoM surge since March 2021’s stimmy-driven surge in spending.
The rebound was mostly driven by a huge jump in non-store retailers (e.g. online, Amazon etc) and in autos…”