2:12 pm
NDX has exited its rising trading channel and sank beneath the 50-day Moving Average at 19500.00. While investors are waiting until Wednesday for the NVDA earnings report, the loss of traction is hard to ignore. The subsequent lower high since last Thursday may seal the deal. It’s time to exit longs in the NDX. The probability of a higher high is fast disappearing. There may be a back-test of the trendline at 19750.00 before the decline.
8:15 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.”
Good Morning!
NDX futures rose to 19769.00 this morning, short of Thursday’s Key Reversal high. Friday’s attempt to make a new high failed miserably. It is noteworthy that while retail customers have been buyers of tech, hedge funds have been net sellers. In addition, this is the last week of corporate buybacks, leaving an already thin liquidity even thinner. The 50-day Moving Average at 19495.68may offer a line in the sand on the direction of the market.
Today’s options chain shows Maximum Investor Pain at 19800.00. Long gamma may start at 20000.00 while short gamma may begin beneath 19770.00.
SPX futures rose to a weekend high at 5645.10, edging out the Thursday high and potentially nullifying Thursday’s Key Reversal. Should stocks go higher, the next resistance is the Cycle Top at 5723.19. Fractal analysis puts the potential high at 5770.00-5800.00. Today is day 269 of the Master Cycle, stretching it thin. The Cycles Model suggests a strong reaction in the market Tuesday and Wednesday.
Today’s op-ex shows Max Pain at 5630.00. Long gamma may begin at 5660.00 while short gamma may start at 5600.00.
ZeroHedge reports, “US futures edged fractionally higher to start the week with small-caps outperforming as last week’s rally, when euphoric investors bought stocks after Fed Chair Jerome Powell’s dovish tilt at Jackson Hole, fizzled. As of 8:00am ET, S&P 500 futures gained 0.1% while and Nasdaq 100 futures turned red after both indexes notched gains of more than 1% on Friday when Powell’s J-Hole speech cemented the case for an interest-rate cut next month; the debate has now shifted to the size of the cut and what that would say about the state of the economy. Pre-market, NVDA which reports earnings this week, was up about 1% leading both Mag7 and Semis higher. Bond yields reversed losses and rose 3 bps tracking the nearly 3% spike in oil after Israel launched a pre-emptive strike involving 100 warplanes on Hezbollah in Lebanon and declared a 48-hour state of emergency while Libya’s Eastern government said on Monday morning it will stop all oil production and export. The yen erased all gains after earlier rising to its strongest level since January as it took reacted to the rise in US yields; the dollar edged up while gold held near a record high. Bitcoin touched $65,000 for the first time in about three weeks. The macro data focus is on Durable/Cap Goods but NVDA earnings on Weds is the key event. Powell’s dovish Jackson Hole speech should give a tailwind to risk assets this week.
VIX futures have been testing the 50-day Moving Average at 16.01 this morning, on day 257 of its Master Cycle. The 50-day offers a line in the sand confirming long or short positions. Thus far, the Master Cycle low may have occurred on August 19 (day 250).
Wednesday’s op-ex shows potential Max Pain at 17.00. Short gamma reigns between 14.00 and 16.00. Long gamma may begin at 20.00. The September 18 op-ex appears loaded for bear.
TNX appears to be testing its Cycle Bottom support at 37.77 this morning. It has the capability of making a new low beneath Wednesday’s 37.63 (day 258). Today is day 263, so there is time to stretch the Master Cycle to the trendline.