9:00 pm
I will be spending the day tomorrow watching three lively granddaughters, ages two to six as their their parents seek a specialized medical treatment for their father, who has Lyme’s disease. I may be unable to communicate the entire day, so I will try to lay out the parameters for tomorrow’s potential action.
SPX futures have gyrated from a low of 3846.50 to a high of 3861.90. Most of the action has been beneath the 50-day Moving Average at 3859.90, a key resistance. The next lower support is at 3750.00. A morning open beneath that may bring the SPX down to 3582.00 (possible limit down). Should SPX go higher, further resistance may be found at 3910.00 and again above 3930.00. Should we see a significant move down tomorrow, trending strength may accelerate the move on both Wednesday and Friday.
Tomorrow’s op-ex shows Maximum Pain for options investors at 3855.00. Long gamma may begin at 3860.00 and rising strength at 3875.00. Short gamma starts at 3850.00 with strength of (short) conviction rising at 3825.00. This appears to be a tight contest until it breaks out in either direction.
VIX futures open tomorrow morning, so there is little to see as yet. A must-see for tomorrow may be a move above the mid-Cycle resistance at 25.75 and breakout above 25.84. VIX has been in a gigantic Triangle formation for the entire year. The time has come for some eye-popping moves.
TNX futures appear to have risen above the trendline at 35.00. If so, TNX may be venturing to new highs in the next three weeks. There may be a burst of strength to the upside by mid-week.