February 2, 2024

9:30 am

Good Morning!

The markets woke up this morning to a stunning payroll reportSPX futures had risen to an overnight high of 4942.10 before the report, but opened near flat.  Confusion reigns.  An aggressive sell signal awaits the SPX beneath 4866.62.  The 1987 trendline, the Ending Diagonal trendline and Intermediate support all group together between 4790.00 and 4793.00, beneath which the sell signal is confirmed.

Today’s options chain shows Maximum Investor Pain at 4915.00.  Long gamma may begin at 4820.00 while short gamma may start at 4905.00.

ZeroHedge remarks, “Well, we did warn readers that anyone hoping for a negative print in an election year would be disappointed, and moments ago the BLS proved us right.

ZeroHedge reports, “US futures and global markets rallied on Friday after tech megacaps Meta and Amazon.com posted blowout earnings (even as Apple dropped on a plunge in China sales and disappointing guidance) and as investors awaited a jobs report expected to support the case for interest-rate cuts. As of 7:30am, S&P 500 futures rose 0.7% while the Nasdaq 100 rose 1% after the indexes advanced by more than 1% Thursday. Rates were flat with 10Y yields unchanged around 3.88% while the dollar dropped and oil extended losses. All eyes will be on today’s jobs report; we also get the latest Factory Orders, Durables Goods and Michigan sentiment (and inflation outlook) prints.”

 

 

9:47 am

VIX futures declined to 13.39 before the payrolls report, but jumped to 14.23 near the open.  Again, confusion reigns as to which direction???

VIX options for next Wednesday show no short gamma, no Maximum Pain.  Calls begin at 12.50 and are populated to 50.00.

 

9:55 am

TNX futures spent the overnight session beneath the trendline until the jobs report.  At that point it soared up to the Intermediate resistance at 38.94 where it currently hovers.  Crossing above the trendline gives TNX a buy signal (a bond sell signal).  Crossing above the Intermediate resistance confirms the signal.

ZeroHedge remarks, “A simply stunning jobs report!

The highest estimate for the Establishment number was 300k and the report beat that high estimate, quite handily, coming in at 353k!

Not only that, but we broke a string of downward revisions, by adding 126k in total to the past 2 reports, with the bulk of that revision for the December report! Back to back months over 300k is impressive and is maybe why confidence numbers have been so high?

Simply a stunning number of jobs created (according to the Establishment survey).”

 

The USD broke out of its 3-week consolidation as it resumes its rally that may last to early March.

 

Crude oil futures have fallen beneath all critical support at 73.48-73.66, reinforcing the sell signal.  Additional nearby support is at 67.71, but the main support is the Cycle Bottom and trendline at 64.71.

ZeroHedge reports, “The largest refinery in the US Midwest has been shut down after a power outage hit the facility Thursday afternoon.

BP’s Whiting refinery, located in Whiting, Indiana, is the Midwest’s largest refinery and largest globally for the British multinational oil and gas company. It can process 440,000 barrels of crude oil daily. ”

 

 

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