September 1, 2023

10:10 am

BKX, our liquidity proxy, is approaching the 50-day Moving Average at 83.50 on day 256 (average 258 days) of the Master Cycle.  While the Cycle may extend to early next week, it may be foolish to expect it to rally much higher, especially should interest rates resume their climb.   The Head & Shoulders target is still active.

ZeroHedge reports, “After last week’s brief (and small) dip, US money-market funds saw inflows once again last week, adding $14.4BN to reach a new record high of $5.5TN…”


8:00 am

Good Morning!

SPX futures have risen overnight to a high of 4527.20, thus far but await the Monthly Jobs Report.  Yesterday’s high at 4532.26 fulfilled the requirements for a Master Cycle on day 261 with a 72% retracement of the July decline.   In two weeks, the SPX went from oversold to overbought.

8:45 am

SPX futures spiked to 4538.90 at the release of the Employment Situation Survey.  Futures have eased down since then.  This extends the likelihood of a Master Cycle high today.

Today’s op-ex shows Maximum investor Pain at 4495.00.  Long gamma may begin at 4500.00, rising to 4600.00.  Short gamma begins at 4475.00 and has large contract sizes every 50 points down to 4300.00, indicating institutional interest.

ZeroHedge reports, “Futures and global markets are higher ahead of the NFP today at 8:30am ET (full preview here). At 7:40am ET, S&P futures rose 0.3% to 4,531 with Nasdaq futures up 0.2%. Major global markets are also higher, led by the UK (UKX +0.5%, SX5E +0.4%, SXXP +0.4%, DAX +0.1%), with the final Eurozone Mfg PMI is revised lower to 43.5 from 43.7, further boosting odds the ECB is done. On September ECB, Greg Fuzesi thinks that the July minutes and Isabel Schnabel’s comments yesterday (“growth had “moderated visibly”) both consistent with a pause in September ECB. He expects the final hike to happen in October after a pause in September. China reduced banks’ reserve requirement of foreign currency deposits, boosting the yuan, while China’s Caixin Mfg PMIsurprised to the upside: 51.0 vs. 49.0 survey vs. 49.2 prior. Bond yields are lower and the Bloomberg dollar index is flat. Commodities are mostly stronger led by oil. Key macro focus will be the labor data release today (NFP, Unemployment Rate, Avg. Hourly Earnings, Labor Force Participation) at 8.30am ET and the Mfg ISM at 10am ET.”



VIX futures declined to 13.22 thus far this morning after the DOL announcement.  This should not be alarming, since Wave {B}s tend to be rogue waves, extending further than the average.

Wednesday’s op-ex shows Max Pain at 14.50.  Long gamma begins at 15.00 and extends to 28.00.


TNX tested Intermediate support at 40.80 this morning and appears to have reversed course, rising above the neckline at 41.00.  Should it remain above the neckline today, a two-week rally may ensue, ending the current Master Cycle.


USD futures are lower as they may find a base at the mid-Cycle support at 102.74.  The Cyclles Model suggests that trending strength may re-appear next week.




This entry was posted in Published. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *