April 30, 2024

8:15 am

Good Morning!

SPX futures slipped to 5104.40 this morning after having tested short-term support at 5085.29 (not shown) during yesterday’s session.  The 50-day Moving Average remains as resistance at 5121.79.  Intermediate resistance is at 5147.06.  A break higher may lead to a new all-time high.  Should the SPX decline, the 1987 trendline at 4960.00 remains as support.  The Cycles Model allows up to three weeks to resolve its dilemma of what to do next.  However, should the SPX remain elevated this week, it may hasten the arrival of a Master Cycle high.

Today’s options chain shows Maximum Investor Pain at 5075.00.  Long gamma may begin at 5100.00 while short gamma starts at 5050.00.

ZeroHedge reports, “US equity futures dropped, and European markets were mixed on the last day of the month amid concerns the Fed may stick to its hawkish messaging at its meeting on Wednesday. As of 7:40am, S&P 500 and Nasdaq futures were down 0.1% while Europe’s Stoxx 600 index retreated 0.4%, while Asian stocks gained on Japan’s return from holiday. The Bloomberg Dollar Spot Index climbed and 10-year Treasury yields were steady at 4.62%. The yen resumed its decline even as a Bloomberg analysis found that Japan almost certainly conducted its first currency intervention since 2022 to prop up the yen on Monday. Commodities were mixed with metals down and oil rebounding from its biggest drop in almost two weeks amid discussions on a possible cease-fire in the Middle East. Macro data today includes Q1 employment cost index, Case Shiller home prices, April MNI Chicago PMI, consumer confidence and Dallas Fed services activity. Bitcoin tumbled after activity on Hong Kong’s new crypto ETFs came in far below expectations.”



VIX futures are consolidating above the mid-Cycle support at 14.94 after having made a potential Master Cycle low on day 256.  Should yesterday’s action mark the low, we may expect to see  the VIX resume its rally to early July.

Tomorrow’s options Chain shows Max Pain at 15.00.  Short gamma rules from 12.50 to 14.00.  Long gamma begins at 17.00, but doesn’t show much enthusiasm.


TNX is rising this morning.  The new Master Cycle is due for completion by May 18.  We may see a phase shift into high gear (rates) over the next 2-3 weeks.

ZeroHedge comments, “Highlighting just how sensitive the market is to any ‘inflation/deflation’ narrative questions, the Q1 Employment Cost Index (ECI) – a data point that is typically of secondary import – printed hotter than expected this morning and sent markets reeling.

The ECI rose from +0.9% QoQ in Q4 to +1.2% QoQ in Q1 (well above the +1.0% QoQ expected). That is the biggest QoQ jump in a year…”


ZeroHedge remarks, “The Federal Reserve’s next move this year is likely to be a rate cut – despite the re-emergence of inflation – leaving markets at risk of a dovish repricing.

When it comes to the Fed, it’s easy to get hung up on what they should do, and neglect what they actually will do. From an inflation perspective, it’s becoming increasingly clear the central bank needs to raise rates further to quell resurgent price growth. But that’s unlikely. Instead, the risks to government funding costs and mounting pressure on liquidity are likely to tilt the Fed in favor of cutting rates, even as inflation is making an unwelcome return.”



USD futures are consolidating in place.  The Wave structure allows the USD to go higher.  Should that happen, we may see a “phase shift” into higher rates until the end of May.


Gold futures have declined beneath the Cycle Top at 2315.23, creating a sell signal.  Further support lies at the Intermediate level at 2285.32.  Critical support lies at the 50-day Moving Average at 2214.23.  The Cycles Model suggests a possible decline to early June, where the 50-day May come into play.






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