US Tech futures hovered just above 15000.00 this morning as they await the monthly Employment Situation Summary due at 8:30 am. The NDX tested the Cycle Top support at 14963.00, but did not decline beneath it. An aggressive sell signal awaits the decline crossing the Cycle Top. The next level of support is the Intermediate level at 14578.57 and the Ending Diagonal trendline jsut beneath it.
Today’s op-ex shows Max Pain at 15050.00. Long gamma begins at 15150.00. Short gamma may begin beneath 15000.00.
ZeroHedge comments, “Unprofitable tech and rates
We have seen a lot of commentary that big tech is immune to surging rates. You decide if you buy that argument, but what about unprofitable tech? There has been a lot of buying, mainly short covering, in unprofitable tech since May according to GS. The great chart needs little commenting…
Surging rates is a problem
You do not compare trending assets to mean reverting assets, but the US 10 year vs VIX chart shows that surging rates is a problem for equities, despite the fact so many people tell you other stories.
SPX futures are hovering just above the Cycle Top support at 4401.54 after challenging that level yesterday. thus far, the Cycle Top is at the June 30 high at 4458.48 on day 260 of the Master Cycle. The Department of Labor’s monthly jobs report is due momentarily.
Today’s op-ex shows Max Pain at 4410.00. Long gamma starts at 4450.00 while short gamma begins at 4400.00.
ZeroHedge reports, “Stocks were subdued as investors prepared for the June jobs report to gauge if they will confirm the blowout ADP print and back new bets for more Fed interest rate hikes which sent yields soaring on Thursday, slamming risk assets. US equity futures reversed earlier losses and traded unchanged after Thursday’s losses in the S&P 500 and Nasdaq 100 benchmarks sparked by stronger-than-expected ADP private payrolls data. As of 6:30am, emini S&P futures were down 0.1% while Nasdaq 100 futs dropped 0.2%. European stocks erased earlier declines of as much as 0.5% to trade flat, but were still on course for their worst week since the middle of March. MSCI Asia Pacific Index declined 1.6% to the lowest since June 2, as strong hiring data in the US renewed monetary tightening worries and investors awaited major stimulus measures from China. Treasury yields extended their ascent, with the 2Y rising back over 5.00% after nearly hitting 5.10% on Thursday while 10Y yields traded around 4.06%, after yesterday’s jobs data sent a gauge of global bond yields soaring to the highest since 2008.”
VIX futures are hovering near the 50-day MOving Average after having broken through it yesterday. It is on a buy signal and pullbacks may be used to add longs or reduce short exposure. The Cycles MOdel infers an uptrend through mid-August, with rising volatility.
Wednesday’s op-ex shows Max pain at 16.00. Short gamma is still strong, while long gamma appears weak.
TNX is hovering near its high made yesterday. Today is day 259 of the current Master Cycle and may be the final high of this Cycle.
The anticipated breakout has occurred this morning. The high thus far is 40.94, overcoming the February high at 40.91. The Cycle Top at 41.34 awaits a possible test before a short-term reversal.
ZeroHedge comments, “BS break down
Fed’s BS printed another new recent low. The SBV “juice” is all gone. Note we haven’t “printed” these levels since Q3 2021.
Why bond yields are up
Liquidity drain over the past 2 weeks driving the bond move. Note another $1tn drain is expected in the upcoming couple of months.
USD futures are pulling back, challenging the 50-day Moving Average at 102.56. The Cycles Model suggests the uptrend may continue through mid-August.