February 7, 2024

8:15 am

NDX futures have risen to 17636.00 thus far as it attempts to rise above the mid-Cycle high at 17682.29.  Large investors tend to run up the markets at the open to see if retail investors take the bait.  Emotions are still running high, so the outcome is still uncertain.

Today’s option chain shows Maximum Investor Pain at 17575.00.  Long gamma begins at 17600.00 while short gamma starts at 17500.00.

 

SPX futures have risen to 4970.60 this morning as attempts are being made to prolong the rally.  The premarket activity is institutional , attempting to bring retail investors on board after the open.

Today’s options chain shows Max Pain at 4930.00.  Long gamma starts at 4940.00 while short gamma beginns at 4925.00.

ZeroHedge reports, “US equity futures and global markets were mixed, while bond yields rose as the Treasury prepared to auction a record $42 billion in 10-year bonds that may indicate if a recent selloff was overdone. As of 7:50am ET, S&P futures rose 0.2%, reversing earlier losses and trading near session highs…

… trading in lock step with sentiment surrounding the latest troubled regional bank, NY Community Bancorp, which tumbled by 16% overnight to the lowest since 1997 after it was downgraded to junk before rebounding more than 10% after announcing it hired Flagstar bank’s Alessandro Dinello as executive chairman.”

 

VIX may be going into a Master Cycle low today as futures are making new lows on day 259 of the current Cycle.  Despite Cyclical pressure to the downside, VIX has succeeded in making higher highs and lows since December.  It may be coiling for a breakout.

 

The Shanghai Composite has risen above the Cycle Bottom resistance at 2812.72.  However, the gain may not be enough to keep it there.  There is still a possibility of a retest of the low by the end of the week.

ZeroHedge observes, “China has appointed capital markets veteran Wu Qing to head the nation’s securities regulator just one day after the country’s sovereign wealth fund said it would ramp up buying shares in the open market amid a three-year rout that has wiped out a staggering $7 trillion in value off stock markets in Hong Kong and China.

Qing, who served as the head of the Shanghai Stock Exchange from 2016 to 2017, has been named the new chairman and party secretary of the China Securities Regulatory Commission (CSRC), taking over from Yi Huiman, who held the post since 2019, according to South China Morning Post, citing state media Xinhua on Wednesday.

SCMP pointed out Qing was the deputy party chief of the financial center of Shanghai. He once oversaw the 2015 meltdown in China’s capital markets. ”

 

TNX appears to be consolidating above the trendline at 40.90.  TNX is in a correction which may take it to the 50-day Moving Average at 40.79.  However, there may be a burst of strength in the next day or two.  Today’s Treasury auction offers $60 billion of 17-week bills, which may not be troublesome.  However, it is also offering $42 billion of 10-year Notes today, which may bear scrutiny.  Tomorrow it auctions off $185 billion in T-bills and $25 billion of 30-year bonds.

ZeroHedge reports, “The results from the week’s first refunding auction are out and they were solid, with the Treasury selling $54BN in 3Y paper at a high yield of 4.169%, up about 6bps from last month’s 4.105% but stopping 0.8bps through the 4.177% When Issued.

The rest of the auction was slightly lackluster: the bid to cover of 2.581 was a drop from last month’s 2.672 (but above December’s 2.416) and below the recent average of 2.662.”

 

 

 

 

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