7:45 am 2 Chronicles 7:14
“If my people, which are called by my name, shall humble themselves, and pray, and seek face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sins, and will heal their land.”
NDX futures continued their inexorable march higher to 19123.70 this morning. It has risen above Short-term resistance at 18993.00 (not shown) and may test the double resistance at 19416.17 before moving higher. Its intended target may be 21150.00. There are no guarantees of its success by the end of the month. Individual investors, stock buybacks and now pension contributions are fueling the rise in stocks. Qualified pension plans have until October 15, 2024 to make their final contribution extension for the plan year 2023. It appears that they are doing so with gusto. At the same time, whale investors like Warren Buffett are culling stocks in companies that are overpriced.
Today’s options chain shows Maximum Investor Pain at 19125.00 There is not long gamma, while short gamma resided beneath 19110.00.
ZeroHedge remarks, “Who owns America?
Is it the government? The politicians? The corporations? The foreign investors? The American people?
While the Deep State keeps the nation divided and distracted by a presidential election whose outcome is foregone (the police state’s stranglehold on power will ensure the continuation of endless wars and out-of-control spending, while disregarding the citizenry’s fundamental rights and the rule of law), America is literally being bought and sold right out from under us.”
SPX futures have risen to 5466.60 this morning, above the 50–day Moving Average at 5448.42. Its intended target by the end of the month may be near 5780.00. The Cycles Model suggests the rally may continue to the end of the month, with rising volatility. This may send the BTFD speculators into a buying frenzy. We will know the trend is over when the last fool is parted with his money. I know many such people. They now think they are bulletproof.
Today’s options chain shows Max Pain at 5450.00. Long gamma may arise above 5500.00 while short gamma dwells beneath 5400.00.
ZeroHedge reports, “US equity futures are following European and most Asian stocks higher, with traders’ attention turning to today’s retail sales report (full preview here) which may support the case for the Federal Reserve to cut rates at its September meeting. As of 7:45am, S&P futures are up 0.2%, higher for the fifth day in a row, as the burst of 13-F releases overnight helps to boost some individual names; Nasdaq futures also gain 0.1% led by tech with Mag7 and Semis leading pre-mkt though NVDA is lower to start the day. Bond yields are flat to up 1bps, and USD is flat. Commodities are bid across all 3 complexes though base metals are lagging and Silver over Gold. PPI/CPI data shaped the inflation story and now Retail Sales/Jobless Claims will do the same for the Growth story, while Walmart boosting its profit outlook will help ease recessionary fears. That said, the Fed may not reveal its hand until the Sep 6 NFP print.”
VIX futures continue their descent toward the 50-day Moving Average at 15.63. I am illustrating the nearness of the Master Cycle low, which may happen this week. Rising volatility in a rising market is a sign of changes to come. The Cycles Model suggests VIX may gain strength as early as this weekend.
The August 21 options chain shows massive short gamma beneath 16.00 and equally massive long gamma above 17.00. If the Master Cycle low occurs today, the shorts may be taken out to the woodshed.
TNX rallied to its trading channel trendline at 39.35 this morning. A breakout here gives a very clear buy signal for TNX /sell signal for UST.
ZeroHedge remarks, “For once, consensus is in line with BofA’s omnipotent forecast for retails today (July data) with an expectation of a 0.4% MoM rise in nominal spending. They were both wrong… as retail sales shot up 1.0% MoM – well above the highest forecast.
That is the biggest MoM rise since Jan 2023 – so to hell with your soft landing narrative, right…”
