June 17, 2024

2:00 pm

SPX has risen to a new all-time-high at 5480.00 thus far.  There are two limitations to the rally.  The first resistance is at 5500.00, also known as round number resistance.  The second resistance is a structural one which, assuming this to be the final probe, limits the rally at 5522.00.  There is no assurance that the SPX may reach either of these numbers.

ZeroHedge notes, “Nvidia (NVDA) accounts for 34% of the 14% SPX year-to-date gain, and five stocks have accounted for 60% of the S&P 500 total YTD return; MSFThttps://www.zerohedge.com/markets/5-stocks-account-60-sps-return-charting-sp-5-vs-sp-495, NVDA, GOOGL, AMZN, and META have collectively surged by 45% and now comprise 25% of the S&P 500 equity cap.”


8:15 am

Good Morning!  Hove you prayed for our country?

SPX futures continue to consolidate in a narrow range.  Often a consolidation may be a pause that refreshes, building up strength for the next move higher.  However, it may also mean indecision.  Support for the uptrend has gone missing as stock buybacks enter their blackout period until July 19.

Today’s options chain shows 5420.00 giving Max Pain.  Long gamma may start at 5450.00 while short gamma becomes strong beneath 5400.00.

ZeroHedge reports, “Futures are flat to start the holiday-shortened week (markets are closed Wednesday for Juneteenth). As of 8:00am, S&P futures are unchanged just above 5500, while Nasdaq futures rose 0.2%; France’s CAC 40 benchmark erased most of its opening 1% advance and global stocks ceded most of their early gains sparked by French far-right leader Marine le Pen’s pledge to respect political institutions if she wins the upcoming snap parliamentary election. Bond yields are slightly higher amid a bear steepening: JPM’s rates strategist sees yields range-bound for the summer with the 10Y being fairly valued at current levels. Euro-area bond yields edged higher, with France’s yield premium over Germany staying near the widest in years. The Bloomberg Dollar Spot Index is up 0.1%, while the euro was modestly firmer against the dollar, after shedding almost 1% last week. Commodities are mixed with energy higher ex-natgas but Ags and metals are coming for sale; metals potentially dragged by weaker than expected data from China overnight. Today’s macro data focus is on Empire Manufacturing but tomorrow’s Retail Sales is the key release this week with additional focus on Friday’s Flash PMIs.”



VIX futures are also consolidating beneath Friday’s high at 13.45.    The Cycles Model suggests that trending strength may break out today.  Hedging should be considered, as the strength of volatility may continue to grow through mid-July.

The monthly VIX op-ex (Tuesday) shows Max Pain at 14.00.  Short gamma lies between 12.00 and 13.50.  Long gamma begins at 15.00 and extends to 47.50.


TNX rose to a weekend high of 42.75 in a clear reversal from last week’s low.  The reversal occurred in a burst of trending strength which may have started over the weekend.  The Cycles Model suggest the rally may extend to the second week of July.

ZeroHedge remarks, “The Federal Reserve’s Federal Open Market Committee (FOMC) last week left the target policy interest rate (the federal funds rate) unchanged at 5.5 percent. The target rate has now been flat at 5.5 percent since July of 2023—as the Fed waits and hopes that everything will turn out fine. In his prepared remarks at Wednesday’s FOMC press conference, Powell continued with the soothing message he has generally employed at these press conferences over the past year. The general message has been one of moderate but sustained growth, and  an economy marked by “strong” employment trends and moderating inflation.”




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