February 20, 2024

10:55 am

NDX is on as ell signal, having crossed both the daily Cycle Top and Diagonal trendline at 17604.57.  Confirmation comes at the 2-hour mid-Cycle support at 17259.96 and the 50-day Moving Average near 16983.85.  The NDX may be prone to surprises through the next 2-3 weeks.

ZeroHedge comments, “The Conference Board’s Leading Economic Indicators (LEI) continued its decline in January, dropping 0.4% MoM (notably worse than the -0.1% MoM expectations), and December’s 0.1% declin e was revised down to a 0.2% decline.

  • The biggest positive contributor to the leading index was stock prices (again) at +0.10
  • The biggest negative contributor was average workweek at -0.18″

 

8:00 am – I am preparing for a journey until the end of March.  Blogging may be spotty, at best, from this point forward.

Good Morning!

NDX futures have fallen to 17555.50 this morning.  It has challenged the Cycle Top Support at 17587.00, where an aggressive sell signal resides.  A confirmed sell signal lies at the trendline at 17250.00.  The Cycles Model suggests the decline may last to February 29, with a possible four day extension after that.  Be aware that I may not be able to comment on it as it happens.  Thjis is the most concentrated market in history.

Today’s options chain shows Maximum Investor Pain at 17650.00.  Long gamma begins at 17700.00.  Short gamma starts at 17600.  Speculators are selling calls and buying puts.

ZeroHedge remarks, “Slight Déjà vu 

The current market scenario is closely mirroring the call option buying frenzy witnessed during the pandemic, with a significant increase in net call volume for mega-cap and tech stocks. Market volatility has risen, particularly in the tech sector, with the VXN index steadily climbing and single stock call option crowding reaching its most extreme levels in three years.”

 

SPX futures declined to a morning low at 4980.1.  Critical support is at 4949.14, where the Cycle Top support atn diagonal trendline lie.  Beneath that lies the first sell signal.  The next sell signal is at the 1987 trendline and Intermediate support at 4866.37, beneath that is a confirmed sell signal.  SPX has lingered near the top since its first break at February 12.  The decline may pick up speed from here with a minimum target at the 50-day Moving Average at 4803.71.

Today’s options chain shows Maxx Pain at 5010.00.  Long gamma may begin at 5025.00 while short gamma reigns beneath 5000.00.

ZeroHedge reports, “After a flat Monday when US cash market were closed for President’s Day, equity futures are pointing to a lower open on Tuesday as the latest earnings reports and corporate news failed to shake concerns about higher-for-longer interest rates and the faltering Chinese economy, while markets braced for the main event: tomorrow’s NVDA earnings after the close. As of 8:00am contracts on the S&P 500 fall 0.3% but rebounded from session lows and were trading just above 5,000; Nasdaq 100 futures lost 0.5%. European stocks were mixed while Asian stocks pulled back from their highest level since April 2022 amid a lack of positive momentum, with a reduction in China’s mortgage reference rate failing to lift sentiment. 10Y yields dropped 1 basis point from Friday’s close (cash Treasuries were closed on Monday), while gold rose, the dollar dipped and bitcoin traded back over $52,000 erasing overnight losses. The only notable macro event today is the Leading Index (exp.-0.3, last -0.1).

 

 

VIX futures rose to an overnight high of 15.41, above the mid-Cycle support/resistance at 14.85 and on a confirmed buy.  The Cycles Model implies that the current Master Cycle may not be over until March 6, with a possible extension to March 8.  The Model suggests some very large swings in VIX throughout that period.

Tomorrow’s options chain shows Max Pain at 14.50.  Short gamma resided from 12.50 to 14.00.  Long gamma begins at 16.00 and remains strong to 42.50.

 

The Shanghai Composite Index rose above its 50-day Moving Average and upper trading channel trendline at 2899.32 to a high of 2927.31, making a bullish breakout.  However, it is overbought and may correct to the week of March 11 before a consolidation or resuming it rally.  It must rise above the mid-Cycle resistance at 3093.70 to break its declining trend.  A decline to its Cycle Bottom at 2813.43 may be constructive in making its target.

ZeroHedge observes, “With onshore traded Chinese stocks closed last week for the Lunar New Year holiday, expectations were high that Monday’s reopen would push domestic markets sharply higher if only to catch up with offshore proxies in Hong Kong and in the US, where the Nasdaq China Golden Dragon ETF has ramped sharply higher in recent days.”

 

 

TNX may be pulling back from its new high to test support at the mid-Cycle at 41.88.  Whether it does or not, the Model suggests TNX may go to 44.00 before a larger correction.

ZeroHedge remarks, “Fred Smith, the founder of executive chairman of shipping giant FedEx, is the latest business leader to sound the alarm that if America’s ballooning public debt is left unchecked, it will threaten to spiral into a catastrophic crisis.

Mr. Smith was asked during an interview on Fox News for his opinion on projections from the Congressional Budget Office (CBO) that U.S. federal debt held by the public will go from 99 percent of gross domestic product (GDP) in 2024 to a record 116 percent in 2034, before pushing above 170 percent by midcentury.

He replied by saying that warnings about the level of government spending adding to America’s public debt are both serious and growing and, “hopefully, I’m adding to the chorus and saying this is unsustainable.”

 

 

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