May 8, 2024

8:00 am

Good Morning!

NDX futures have hit a morning low of  18044..00, suggesting the rally may have weakened overnight.  If so, we must look for a violation of support at the 50-day Moving Average at 17933.52, which may produce a sell signal.  That sell signal may announce the early termination of the current Master Cycle (shown on the chart).  Should this occur, the Cycles Model suggests a potential panic beginning by the end of this week.

Today’s options chain shows the longs prevail above 17925.00 while short gamma begin beneath 17900.00.


SPX futures have declined to 5169.00 thus far, as the index weakens this morning.  Support lies at the Intermediate interval at 5137.00, where a potential sell signal exists.  Violating this support may signal the early termination of the current Master Cycle.  If so, a month-long panic Cycle may set in.

Today’s options chain shows Max Pain at 5185.00  Long gamma starts immediately at 5190.00, while short gamma may begin at 5180 and strengthens at 5170.00.

ZeroHedge reports, “US equity futures flipped between gains and losses on Wednesday while European stocks hit an all time high as May’s rally in equities continued amid a clutch of solid earnings reports. As of 7:45am,  S&P 500 futures traded down 0.2%, and was near session lows reversing an earlier modest gain after the underlying gauge advanced the previous four sessions. The benchmark Treasury yield rose two basis points to 4.48%. Oil fell to the lowest level since mid-March, after a mildly bearish US stockpile report. The renewed plunge in the yen took the USDJPY as high as 155.5 amid a renewed bout of impotent jawboning by Japanese officials who however have now lost all credibility. Later today the focus will be on comments from Fed officials, including Lisa Cook, and earnings from Uber, Arm and Airbnb.”



VIX futures have risen to 13.48 thus far, indicating a potential change in the Master Cycle on May 7.  Should that be the case, VIX may be due for a panic rally by the end of the week.  In addition, the VIX Master Cycle syncs back (inversely) with the SPX Master Cycle for the next two months.  What comes after may be a very strong rally.

Today’s options expiration inthe VIX shows Maximum Investor Pain at 14.50.  Short gamma dwells at 14.00 while long gamma begins at 15.00 and remains strong to 30.00.


TNX has begun to rise from its low above the 50-day Moving Average at 43.89.  Yesterday is also a potential early MC low.  Multiple indexes appear to be synced up to May 7.  It may be an important turn.  In addition, upcoming Treasury auctions may provide a significant increase in volatility.

ZeroHedge reports, “The first refunding auction of the quarter just concluded when the Treasury sold $58BN in 3 Year paper, unchanged from last month’s size and matching the previous record high hit during the covid crisis.

The auction priced at a high yield of 4.605%, up from 4.548% in April, but while that auction tailed by 2bps, today’s auction stopped through the When Issued 4.608% by 0.3bps, the 4th stopping through auction in the past five as shown below.”

ZeroHedge notes, “We have been referring to the growth of M2 (money supply) as one of the factors that shows that the Fed has NOT been fighting inflation in our previous articles on Zerohedge (“The Fed Is the Instigator of Speculative Bubbles,” and “The Makings of a Huge Speculative Frenzy, Bigger Than The Dotcom Bubble).

Let’s face it; the Fed is all talk!

Below we show the updated weekly chart of Money Supply M2, which continues to soar. It is the “not seasonally adjusted” and therefore, does not include the usual fudge factor of “seasonal adjustment” (chart via St. Louis Fed, with our annotations).”




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