8:15 am
Good Morning!
NDX futures rose to an overnight high of 18279.30, nearly making the 61.8% Fibonacci retracement at 18292.00. The Cycles Model suggests a probable brief retracement high this morning prior to resuming the decline. Intermediate support and the Diagonal Trendline lie at 18043.19, beneath which a confirmed sell signal may be made.
This morning’s options chain shows Maximum Pain for investors at 18160.00. Long gamma may start at 18170.00 while short gamma may begin at 18150.00.
SPX futures have risen to an overnight high of 5234.80 thus far, a near-61.8% retracement. There may be a brief probe to a new retracement high at the trendline in the cash market followed by a likely resumption of the decline. This may fulfil the trending strength indicated by the Cycles Model yesterday. Remember, the trend is still “higher” at this juncture although a reversal may have been made.
Today’s op-ex shows Max pain at 5220.00. Long gamma may begin at 5225.00 while short gamma may start at 5215.00.
ZeroHedge reports, “US equity futures are higher with both Tech and small-caps outperforming, while the dollar is lower even as yields are higher from Wednesday’s close. As of 7:50am, S&P futures were 0.3% higher and Nasdaq futs rose 0.4%, boosted by Powell’s comments that recent inflation figures did not “materially change” the overall picture while the latest ISM Services print was far less inflationary than the ISM Manufacturing print, in fact bizarrely so. In Europe, major markets are also all higher as part of a global risk-on tone. Bond yields are +1-2 bps, even as Bloomberg’s dollar index extended its slide for a third day, following its biggest one-day fall in nearly four weeks. In commodities, energy is a tad lower with Brent trading just below $90, metals are mixed, and Ags are stronger; copper – which as we noted previously could be the first “AI commodity” is the notable outperformer. Today’s macro data focus is on jobless claims but likely will be ignored with the jobs report tomorrow; we also get seven Fed speakers today.”
VIX futures sagged to a low of 14.03 this morning, near the 50% retracement level at 13.92. It is odd that the retracement percentage in the VIX is lower than that of the SPX. The Cycles MOdel shows the VIX gaining in trending strength by this weekend.
Next Wednesday’s op-ex shows Max Investor Pain at 14.50. Short gamma has moved up to 14.00, while long gamma begins at 16.00. There seems to be no rush to buy protection.
TNX has pulled back from its breakout high made yesterday. The rally may resume, in strength, after a brief consolidation.
ZeroHedge observes, “MOVE inching higher
MOVE closed marginally higher yesterday. The latest “bounce” in rates volatility has actually been one of the bigger moves higher in a while. From recent lows, but still…”
