May 16, 2024

10:35 am

SPX is in a “throw-over” mode above the Cycle Top and upper trendline at 5305.00.  An aggressive sell signal may be made beneath 5305.00.  A trendline (confirmed) sell signal may be available beneath 5275.00.  Sentiment appears at an all-time high as well!  Nineveh’s 40 days are fast approaching on May 18.

ZeroHedge observes, “With US inflation and retail sales both cooling, bets that the Federal Reserve will cut interest rates are back, and there isn’t much left that could stop stocks from hitting new highs.

After most equity markets fully erased April losses — brushing off a perceived delay in rate cuts, sticky inflation and signs of slowing in the US job market — nothing seems to be able to halt stocks. Financial conditions are loose, the economy is holding up and even recovering in Europe, the technical picture is bullish, and the earnings season was overall pretty reassuring once again.


8:00 am  

Good Morning!  Have you prayed this morning?

NDX futures have made a new morning high at 18642.00.  Whether it becomes the new all-time-high is yet to be seen.  Today is day 258 of the Master Cycle.  We may be only a few hours from a reversal.  NDX indicators have not left us an aggressive sell level.  The 50-day Moving Average is at 17965.00, beneath which a possibly confirmed sell signal may await.

Today’s options chain shows Maximum Investor Pain at 18590.00.  Long gamma starts at 18600.00 while short gamma may begin beneath 18560.00.

ZeroHedge remarks, “The Superstar Economy

  • The stellar performance of the S&P 500 superstars is not representative of the profits of wider corporate America.
  • For the direction of the US jobs market, we should closely monitor the profits of the 6.4 million non-superstar US companies that account for 85 percent of US jobs. These profits have been softening.
  • The US stock market’s record 50 percent valuation premium versus the non-US stock market is pricing generative AI to do through the next decade what the Web 2.0 network effect did through the last decade.”


SPX futures rose to 5320.10 this morning, but have subsequently pulled back to the flat line.  The rally has lasted 18.5 days since the April 19 low.  Today is day 258 of the Master Cycle, which is in the process of making a top.  The target needed to accomplish this is “near 5300.00.”  Mission accomplished.  The rest may be likened to guests who refuse to leave the party.  Apparently, the market isn’t reading jay Powell’s lips, “No easing in sight.”  An aggressive sell signal may be used beneath 5290.00.


Today’s options expiration shows Max Pain at 5295.00.  The parameters are tight, as long gamma begins at 5300.00 while short gamma may start at 5290.00.

ZeroHedge reports, “US index futures are flat after notching new record highs on the S&P 500 and Nasdaq 100, spurred on by a miss in the US CPI print and retail sales data on Wednesday, which also boosted bets the Federal Reserve will ease policy. That inflation data, which the market was feverishly anticipating, was inadvertently published 30 minutes early the BLS reported, raising fresh questions about how some of the world’s most sensitive economic information is released. As of 7:30am, S&P and Nasdaq futs are up 0.1% with small caps underperforming, potentially on growth fears, so it will be interesting if this morning’s stronger than expected WMT earnings can ease those fears. With the main data point of the week now past, investors will turn to Fed speakers and jobless claims data for new clues on the path of interest rates. Bond yields are moving +/-1 bp as the curve twists flatter. The US dollar looks to rally for the first time this week. Commodities are higher led by base metals with copper soaring for another day because of a short squeeze on the Comex exchange. The macro data focus is on Housing Starts/Building Permits, Import/Export Prices, and Industrial Production. NVDA reports next week so may see investors begin positioning for that. ”



VIX futures consolidated in place this morning, after the new low that was made yesterday.  The new Master Cycle low was the equivalent of moving the goalposts, as it indicated a higher degree Primary Cycle at play.

The May 22 (monthly) options expiration shows Max Pain at 15.50.  Short gamma stretched from 12.00 to 15.00.  Long gamma starts at 16.00 and shows strength to 60.00.

ZeroHedge is concerned, “The economy is signaling a more volatile, potentially recessionary period. Markets, however, aren’t paying attention. Not only are the twin tail risks of a downturn or resurgent inflation being ignored, but a near-impossible “immaculate acceleration” of boomy growth and benign price appreciation is becoming the base case.

It’s not the first time that markets and the economy have been at odds, but this is one of the most egregious. Just as the economic mood music becomes more somber and underlying signs of persistent price pressures continue to fester, the market has virtually eliminated the tail risks of a recession or an inflationary shock.”


TNX futures dropped to 43.11 (the cash low is 43.19) as it may be making its Master Cycle low this morning on day 258.    Note that the TNX has never dipped meaningfully beneath its trendline since August 3, 2020.  Today the US Treasury is auctioning $80 billion US Bills and will be announcing the 20 year bond auction amount due next week.  There are no 10-year note on auction this month.  It would be a surprise if the Fed offered a 10-year note auction.A TNX buy signal may be made above 44.09.

RealInvestmentAdvice observes, “ince the pandemic-related bazooka of fiscal stimulus, the outstanding Federal debt has risen appreciably. In nominal dollar terms, the recent debt surge is mindboggling. However, the increase is on par with the government’s negligent ways over the last fifty years.

The red bars show the percentage increase in debt starting in 1966. The bars reset to zero every time they hit 50%. The numbers to the left of each series of bars correspond to the number of quarters it took for every 50% increase.”

growth of federal debt



USD futures are consolidating beneath its 50-day Moving Average at 104.56 this morning.  Today is day 251 of the current Master Cycle.  It is due for a reversal, possibly by the end of the week.  Should that be the case, the USD may make new highs by mid-June.

ZeroHedge notes, “Demand for long exposure in the dollar through options at the back-end of the curve suggests position rebalancing is the main driver of latest spot price action.

Investors were long the greenback in the spot market and at the front-end of the curve until a week ago; BBDXY is now trading at its lowest in more than a month but remains above the April lows”






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