9:50 am
BKX declined beneath the Cycle Top support/resistance at 114.86 and beneath its Master Cycle high at 116.05 made on August 30. BKX may owe its rally until the end of August to hedge funds that were buying, while Berkshire Hathaway was selling. Buffett sure knows how to pick a top.
1:42 pm
BKX declined through Intermediate support at 111.06 and has challenged the 50-day Moving Average at 109.75. The Sell signal is confirmed today.
ZeroHedge remarks, “94-year-old Warren Buffett’s Berkshire Hathaway continued offloading Bank of America shares this week. Since Buffett started dumping BofA stock in mid-July, total sales have now topped nearly $7 billion.
Bloomberg explains:
In the latest round of transactions, disclosed in a regulatory filing Thursday, his Berkshire Hathaway Inc. liquidated $760 million of the stock since Tuesday. Still, Berkshire remains Bank of America’s top shareholder, with a roughly 11% stake valued at $34.7 billion, based on the latest closing price.
If Berkshire keeps selling, its stake in the second-largest US bank could soon slide below the 10% regulatory threshold that requires his conglomerate to disclose transactions within a few days. Once he controls less than that, Buffett may wait weeks to reveal transactions — typically offering snapshots after every quarter.
Berkshire Hathaway remains BofA’s number one shareholder, with an 11% stake valued at $34.7 billion. ”
8:00 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 have declined beneath yesterday’s low to 18673.80 in anticipation of the nonfarm payrolls report due at 8:30 am. The consensus is a rise in the employment numbers to 165,000 from July’s print at 114,000. A number below the consensus gives rise to a possible .5% rate cut on September 18. The Biden DOL may be sorely tempted to “goose” that number higher as it seeks to paint a pretty face on the “facts.” Another number that is due to rise after the 818,000 “adjustment” made in the statistics last month. focal point is the unemployment rate at 4.3% in July. Traders are hoping that the NDX may be oversold enough to bounce today. The Wave structure does not indicate a bounce.
Today’s options chain shows Max Pain at 19025.00. Long gamma may start at 19100.00 while short gamma begins strongly at 19000.00.
SPX futures declined to a morning low at 5457.10 before a small bounce. More to come after the DOL release of nonfarm payrolls.
9:00 am
SPX futures bounced back above 5500.00 on the employment news, which was not too far from the consensus, ruling out a .5% rate cut. What was noteworthy was the decline in the unemployment rate which moved beneath the Sahm”s Rule trigger announcing a recession. We may see a probe to 5550.00, which is Max Pain in the options. The probability of holding it there is slim.
Today’s op-ex shows an evenly matched strike at 5550.00. Long gamma makes an appearance at 5600.00 while short gamma gains ascendancy at 5515.00. It will take a payroll report of under 165,000 to move above short gamma.
ZeroHedge reports, “Futures are set to end a dismal first week of September lower, with tech again under pressure ahead of a very important jobs report. As of 8:00am, S&P futures are down 0.6% set for a 4th straight day of declines following a sudden dump around the European open; Nasdaq futures slide 1% as NVDA slides more than 2% pre-market while Broadcom also weighed on tech stocks after falling 9% after delivering a disappointing sales forecast. Bond yields are also lower, with the 10Y at 3.70%, the lowest since June 2023 as 2-, 5-, 10- yr yields are 3bp, 3bp, 3bp lower. The Bloomberg dollar index was lower for third day while the yen continues to surge on expectations today’s NFP will come in below expectations and greenlight a 50bps rate cut. Commodities are mixed with base metals higher and oil flat. Today, all eyes on the NFP print at 8.30am ET. Consensus expects 165k jobs being added, with unemployment dropping to 4.2% (our full preview is here). Fed’s Williams and Waller will speak this afternoon before the blackout period begins.”
VIX futures remain beneath the Cycle Top resistance at 20.86 in the overnight session. As mentioned earlier, this week’s rally in the VIX was more dealer short covering than investor concern about their portfolios. Today’s consolidation illustrates the confusion about the Employment Survey where employment increased by 142,000 (below consensus) but unemployment declined to 4.2%. from 4.3%. A 50% retracement may be found at 18.57.
The September 11 options chain shows Max Pain at 18.00. Short gamma resides between 15.00 and 17.00. while long gamma may begin at 20.00-21.00.
TNX may have extended its new Master Cycle low to today, day 254. There is a shrinking prospect of the Master Cycle lasting to early next week. A rise back above the Cycle Bottom resistance at 37.30 may negate that possibility.
ZeroHedge observes, “There was some good news and some bad news in today’s jobs report – first the bad news: the August payrolls number came in at 142K, a small miss to estimates of a 165K print, if a big jump from the downward revised July print of 89K. The good news, however, is that while the payrolls print missed, the unemployment rate actually dipped from that critical “Sahm’s Rule trigger” level of 4.3%, to 4.2%, in line with expectations. So bottom line: the number could be better, but it is certainly not bad enough to trigger a 50bps rate cut in two weeks.
Here are the details.
As noted above, in August, the US added 142K jobs…
… which was slightly below estimates of a 165K print, but hardly some crazy outlier as in previous months.”
USD futures declined to the trendline above the Master Cycle low at 100.40 to 100.52 before reversing above its Cycle Bottom at 101.05. Should it remain above 101.05, USD will be on a buy signal, confounding the “experts.”