August 31, 2022

12:10 pm

SPX continues to linger near the 50-day Moving Average.  However, the decline is no longer impulsive, which suggests a short squeeze may be at hand.  A suggested target may be between 4100.00 and 4150.00 with the mid-Cycle resistance at 4086.50 as a minimum.  This is not a time to go long.

3:40 pm

the marginal new low at 3956.37 may (still) not be impulsive.   What a nasty way to end the month of August.  The dealers are bloodied, but may be able to hold the line.  Let’s see what that last half hour may do.  VIX isn’t buying the slide in SPX.


7:50 am

Good Morning!

NDX futures attempted to scale back above the 50-day Moving Average at 12455.56 in the overnight market, but pulled back beneath it this morning.  This leaves NDX in a weakened state.  Worse yet, the 50-day is beneath the 100-day Moving Average at 12617.31, a bearish cross.  The short-term Cycles call for a bounce into the end of the week, but today’s overhead resistance is still not overcome.  August may cloes at a loss just in time for September earnings announcements.

In today’s options expiration Max Pain is at 12475.00.  Short gamma appears to start at 12400.00.  Long gamma starts at 12500.00.  QQQ(closing price: 301.02) appears to be in short gamma beneath 305.00 in today’s options expiration.


SPX futures consolidated near the 50-day Moving Average at 3996.66 after closing beneath it.  It currently rests just above 4000.00, a very populated area for puts and calls.

In today’s op-ex, Max Pain is at 4060.00.  Long gamma may begin at 4100.00, while short gamma kicks in beneath 4000.00.

ZeroHedge reports, “After three days of steep declines, S&P futures traded between modest gains and losses as global markets headed for the third consecutive weekly decline and another monthly drop on concerns that aggressive central bank tightening will push the global economy into a hard recession. At 7:15am ET, futures were up 0.2% and Nasdaq futures rose 0.7%, after trading both higher and lower earlier in the session. The dollar rose, Treasury yields jumped after another record CPI print in Europe, while the bizarre oil slump extended.”



VIX futures are consolidating just above the mid-Cycle support at 25.03.  The Cycles Model allows a final probe higher before correcting.  We may see some fireworks by mid-morning, should that occur.


TNX futures rose to an overnight high at 31.64, but it hasn’t shown up in the cash market, yet.  The current Master Cycle may not be over yet, although it has already clocked 270 days.  Should the new Master cycle begin today, it may extend to mid-November, about 11 weeks.  At a minimum, we often see corrections of this sort decline to mid-Cycle support at 24.53.  However, with the length of time anticipated, it may go much lower.


USD futures are testing the Cycle Top at 109.66 this morning, rising to 109.17 thus far.  The Cycles Model suggests USD may continue its rally through the end of September.  The week of September 5 shows exceptional strength in the rally.


West Texas Intermediate Crude futures have pulled back to 88.30 this morning.  This appears to be a normal pullback with the Cycles Model suggesting new strength emerging next week.  An alternate view, is a further decline, should WTIC drop beneath the prior Master Cycle low.

ZeroHedge comments, “Echoing what we said first two months ago (“Inside The Oil Market’s Jekyll-And-Hyde Moment“), an observation confirmed first by Goldman on more than one occasion (here and here), and also the Saudi Energy minister bin Salman who one week ago said that “the paper and physical markets have become increasingly more disconnected” due to lack of liquidity, this morning none other than Pierre Andurand, the head of the world’s largest oil hedge fund and the commodities trader known for his bullish calls (and record gains in the past year) tweeted that the oil futures market is now “completely broken” as futures can now move $10 lower a day “for no apparent reason” (just wait until he learns about S&P futures…)”



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