April 11, 2023

8:00 am

Good Morning!

NDX futures are hovering near the bottom of yesterday’s trading range, but have not yet broken down.  The swing high was made last Tuesday and a correction of the decline is still in progress.  It appears that there may be a final probe to 13080.00 this morning, ending the corrective phase.

Today’s op-ex shows Max Pain at 13050.00.  Long gamma rules above 13100.00, while short gamma begins at 13000.00.  Sentiment appears to be slowly turning in NDX options.

ZeroHedge notes, “NASDAQ technicals

Trapped inside the big range, trading just above the 13k support level. Note the short term trend channel. Time to make a decisive move soon…”

 

 

SPX futures are flat, but may be poised to make a nominal new high before reversing back down.  The retracement may be nearly complete.  The hourly Cycle may reach its target in the first hour of trading.  Following the reversal, we may expect SPX to decline for the balance of April.  SPX is on an aggressive sell above the 50-day Moving Average at 4030.00, where the sell signal is confirmed.

In today’s op-ex, 4100.00 is hotly contested by both puts and calls.  Long gamma may begin at 4125.00 while short gamma starts at 4050.00.

ZeroHedge reports, “US equity futures held on to post-holiday gains as traders awaited tomorrow’s inflation data for clues about whether the Fed’s tightening cycle is done or if it will hike once more in May (currently market odds are 74% after Friday’s strong jobs report) and also prepared for the start of the first-quarter earnings season when the big banks report on Friday. S&P 500 contracts were flat as of 7:40 a.m. ET, fading earlier gains after the underlying benchmark pulled off another late recovery on Monday as investors shrugged off fears of one more Fed rate hike in the wake of Friday’s strong US employment data. Nasdaq 100 futures dipped 0.2% after rising modestly earlier.”

 

 

VIX futures are flat, near the lower end of its trading range.  Last Thursday’s belated Master Cycle low was a bit of a surprise, but the message is clear…no more new lows.

In tomorrow’s op-ex, puts have been virtually abolished, with long gamma starting at 17.00 and running to 35.00.  Next week’s monthly op-ex shows Max Pain at 22.00 with short gamma starting at 21.00 and long gamma beginning at 24.00 and running strong to 100.00.  The fuel for a panic attack is there, should the market go south.

 

TNX is pulling back after a major crack-up from its Master Cycle low last Thursday.  The Cycles Model suggests more of the same kind of move today, as well.  The next resistance is the 200-day Moving Average at 35.07, followed by the mid-Cycle resistance at 35.48.  The new Master Cycle may be a short one, ending in another possible burst of energy at the end of April.

ZeroHedge observes, “This feels very stagflationary.

As the labor market starts to finally crack (the most lagged economic signal), and consumer credit growth slows (at their limits), The Fed has a problem as, according to the New York Fed’s March Survey of Consumer Expectations, inflation expectations are on the rise once again, especially the short-term.

Median inflation expectations increased by 0.5 percentage point at the one-year-ahead timeframe to 4.7%, the first increase in the series since October 2022. Median inflation expectations for the three-year-ahead horizon edged up 0.1 pp to 2.8%.”

 

 

USD futures are pulling back from yesterday’s surge to consolidate before probing the 50-day Moving Average at 103.18.  The Cycles Model calls fo a continued surge higher through the end of April, possibly to early May.  This about-face may catch many traders off guard, as they are short the USD.

 

Gold bounced from its Cycle Top support at 1998.70 after making its Master Cycle high last Wednesday.  It is time to sell the bounces as the Cycles Model infers a decline to the end of April.  The decline may be steep, so long positions should be sold.

 

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