January 9, 2024

3:43 pm

SPX is closing right at the cusp of a breakdown after retracing 67% of the first week decline.  This appears to be a one-off event.  As mentioned this morning, it is attempting a close at “Max Pain” at 4750.00.  A close beneath that may result in a decline.  Nearby support is at 4743.00, beneath which short gamma may take hold at 4740.00..

 

8:15 am

Good Morning!

NDX futures have reversed down to 16534.40 this morning after being repelled by short-term resistance at 16650.00, a 66% retracement.  Today is day 258 of the former Master Cycle.  Thus far, it appears to be early, on December 28.  An early appearance may be followed bay a “shadow high” on the correct day, that is today.

This morning’s options chain is flirting with short gamma at 16600.00.  There is a huge put wall at 16680.00 that may block a further rally.

ZeroHedge remarks, “In retrospect today’s torrid meltup in the Nasdaq, and the MagnifiSeven in particular, was largely preordained following our weekend post that “Hedge Funds and Long-Onlies had Resumed Dumping Tech Stocks At Furious Pace” with the “Largest Selling Since Mid-October.” Of course, in this market which loves inflicting max pain on a daily if not hourly basis, it was inevitable that the one trade which the smart money was rapidly liquidating – in this case the Info Tech Long/Short pair trade…

… would be insta-jammed higher, leading to the best day for the Nasdaq since mid-November.”

 

 

SPX futures reversed down to 4739.40 after being repelled by the 1987 trendline at 4765.00.  AS mentioned earlier, we may be watching a “shadow Cycle”  occurring on Day 258.  Barring a further rally, we will leave the Master Cycle high at December 28.

Today’s options chain shows Max Pain at 4750.00.  Long gamma may start at 4755.00 while short gamma starts at 4740.00.

ZeroHedge reports, “US stock futures dropped amid a risk-off tone as Monday’s tech-fueled bounce fizzled and investors turned their attention to this week’s inflation print as well as the start of corporate earnings season. As of 7:40am ET, S&P futures were down 0.3%, and Nasdaq futures dropped 0.5% following European bourses lower. The tech rally in US stocks on Monday came as Nvidia surged after announcing new AI products for personal computers. The Nasdaq 100 jumped the most since November on Monday and the S&P 500 traded near a record high while Japan’s Nikkei 225 index closed up 1.2% — a level unseen since March 1990. Bonds are lower pushing the 10Y yield as high as 4.05% as oil bounced back from the largest drop in about a month on signs of a weaker physical market, including a deep pricing cut by OPEC+ leader Saudi Arabia; Brent traded near session highs around $78. The USD was flat while the yen reversed earlier gains. Bitcoin dipped after surging past $47,000 on bets that the US is set to approve the first spot ETF.”

 

 

VIX futures are consolidating beneath the 50-day Moving Average at 13.95.  The Cycles Model calls for the probable uptrend ti become more established at the end of the week.

Tomorrow’s op-ex shows Max Investor Pain at 13.50.  Short gamma is in short supply while long gamma begins at 15.00.

 

TNX is consolidating beneath its 200-day Moving Average at 40.50 after a brief challenge in the overni8ght session.    The Cycles Model suggests a gathering of strength in the uptrend that may break out early next week.  The uptrend may resume above the Head & Shoulders neckline at 41.00.

 

USD futures pulled back to 101.83 this morning.  A decline to an estimated 101.00-101.50 may be in store for today.  The rally appears to be a long-lasting one, to early March, as a world-wide decline in stocks and bonds develops.

 

 

 

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