8:30 am Sorry for the delay. Internet issues being resolved.
NDX futures have fallen back beneath short-term support at 15906.84, but appears to be bouncing. NDX is on an aggressive sell and is expected to show increased volatility.
Today’s options chain shows Max Pain at 16000.00 with calls outnumbering puts at a ratio of 2-1. However, there is an anomalous finding of a large number of puts at 16070.00.
ZeroHedge remarks, “Ahead of today’s jobs report (which we previewed as being focused mostly on the unemployment rate), we said that the whisper was for a stronger report due to the mandatory political talking points for the White House taking credit for all those strikers coming back to work…
… and lo and behold, that’s precisely what happened, with the total number of job gains in November coming in at 199K, above last month’s 150K and, more importantly, well above the consensus forecast of 183K.”
SPX futures continue to consolidate in its two-week trading range. Support is at 4544.00 where an aggressive sell signal awaits. This phase of the Cycle takes great patience and alertness, as the long consolidation acts like a coiled spring.
Today’s options chain shows Max Pain at 4580.00-4585.00. Long gamma starts at 4600.00 while short gamma may begin at 4575.00. Options also appear tightly wound, waiting for a trigger to set off an explosive move in either direction.
ZeroHedge reports, “S equity futures and bonds both dropped after a tech-fueled advance in the previous session, while the dollar and oil gained in what were small moves ahead of the November jobs report while will provide more information on whether the labor market is cooling fast enough to bring the Federal Reserve closer to cut rates as soon as March (full payrolls preview here). As of 7:55am ET, S&P futures dropped 0.1%, erasing a part of Thursday’s rally while Nasdaq futures dropped 0.3%. Treasury 10-year yields approached 4.2%, rising for a second day. The dollar was little changed as the Japanese yen weakened, paring its biggest gain since January, while the Canadian dollar reversed four sessions of losses to edge higher. Oil futures rose 1.5% from the lowest closing level since July. In macro, the day’s big event is the jobs report where consensus expects a 183K print and unemployment remaining flat at 3.9%
But, after the jobs report, the markets are confused. ZeroHedge observes, “Flat wage growth (hotter than expected MoM), lower unemployment rate (good news is bad news), more jobs added (good news is bad news)… but the narrative-delivers claim “goldilocks”.
This looks anything but goldilocks and the kneejerk reactions agreed with rates and the dollar higher (hawkish) and stocks lower.
But that has basically all been unwound now.
Dollar is down…
VIX futures briefly spiked to 13.17before moving lower this morning. VIX is another tightly wound spring, ready to violently break out. The Cycles Model calls for trending (upside) strength to return early next week.
Next Wednesday’s options chain shows Max Pain at 16.00. Short gamma reigns from 12.00 to 15.00. Long gamma of any consequence is not to be found.
TNX lurched higher to 42.79, before subsiding, still at a substantial increase.