May 6, 2024

8:15 am

Good Morning!

SPX futures have risen to a new retracement high at 5148.00 this morning.  The Cycles Model allows up to two more weeks of possible rally. However, today is day 248, where early turns may happen.  SPX has risen above Intermediate resistance at 5136.00, allowing the bounce/rally to proceed.   Should the Cycle allow SPX to proceed the full term, a possible target for htis Master Cycle may be the Cycle Top resistance at 5371.60.  However, an early turn may shorten the target to the March 28 high at 5264.65.

Today’s options chain shows Maximum investor pain at 5115.00.  Long gamma may start at 5135.00 with strength developing above 5150.00.  Short gamma may begin at 5100.00.

ZeroHedge reports, “Global stocks and US equity futures jumped to start the new week, with the S&P 500 poised to extend last week’s rally as traders grew increasingly confident in the likelihood that the Fed will cut interest rates this year. As of 7:40am, S&P 500 and Nasdaq 100 futures added 0.3%, tracking gains in European and Asian markets although trading volumes were lower than average as UK and Japanese markets are shut for a holiday. Apple slid in pre-market trading after Berkshire Hathaway trimmed its stake for a second consecutive quarter. German 10-year yields fell and the yen weakened. Oil advanced after Saudi Arabia raised prices for customers in Asia. On today’s calendar we get the latest Senior Loan Officer Opinion Survey (SLOOS) which will signal whether demand for tight credit remains dismal.”



VIX futures are consolidating above Friday’s low on day 260 of the Cycles Model.  The reason I am allowing for an early turn in the SPX is because the VIX Cycle does not Sync with the SPX Cycle.  While the VIX may rise alongside the SPX, it is not commo and suggests other forces may be at work.  A rising “fear factor” may suggest a certain wariness among investors causing them to react more quickly.

The May 8 op-ex shows Maximum Investor Pain at 14.50.  There is a contingent of short gamma at 14.00, but long gamma starts immediately at 15.00 and runs with some conviction to 30.00.


TNX consolidated above Friday’s low at 44.53 this morning.   The Cycles Model allows up to two more weeks of decline, but multiple supports between 44.38 and 43.40 may ultimately exhaust the decline with no trending strength to power it through those levels.

ZeroHedge comments, ” The Fed’s preferred inflation measure rose 2.8% in March from a year ago. This is the core personal consumption expenditures price index, excluding food and energy, which should be less volatile than the consumer price index and a better indicator of the real process of disinflation.

This figure is not only concerning, considering the propaganda that repeats that the fight against inflation is nearing its conclusion, but it becomes even more so when we observe the upward trend over the last three and six months. Inflation has accelerated on a quarterly and half-year basis.

As E.J. Anthony, PhD economist, points out, “there was never any indication we were heading to the 2.0% inflation target, let alone the pre-pandemic 1.8% average; we’ve arrived at 3%+ with no indication we’re going significantly lower anytime soon, not with the current levels of Treasury borrowing and Fed allowing money supply growth.”


USD futures continue to consolidate above the 50-day Moving Average at 104.39.  While it may have up to two more weeks in its Master Cycle, it doesn’t have far to go, as the mid-Cycle support at 104.19 may be its ultimate support.





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