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 have declined to 19677.90 this morning despite excess liquidity near all-time 50-year highs. The Nasdaq Hi-Lo Index dipped to -23 yesterday for the first time since September 11, suggesting that it is not responding to all of the excess liquidity in the system. NDX is currently on an aggressive sell signal. However, a confirmed sell signal lies beneath Intermediate support at 19480.88. Whispers of an impending crisis are in circulation, while our leaders remain tight-lipped.
Today’s options chain shows Max Pain at 19770.00. Long gamma may start at 19800.00 while short gamma may begin beneath 19725.00.
SPX futures dropped to 5684.10 this morning, currently giving an aggressive sell signal. Intermediate support lies at 5611.57, beneath this we may find a confirmed sell signal. The 50-day Moving Average lies at 5538.22, commonly recognized as a confirmed sell signal. The decline may become more pronounced as the week progresses. Trending strength begins to appear next week, indicating possible panic conditions.
Today’s options chain shows Max Pain at 5705.00. Long gamma may begin above 5715.00 while short gamma resides beneath 5700.00.
ZeroHedge reports, “US equity futures are weaker with small caps underperforming while Treasuries erased some of the previous day’s gains as escalating tensions in the Middle East spooked traders and sent oil sharply higher for a second day after Iran fired about 200 ballistic missiles at Israel, drawing a vow of retaliation from Prime Minister Benjamin Netanyahu and further raising the risks to crude supplies from the region. As of 8:00am ET S&P futures were down 0.2% but off the worst levels of the session following yesterday’s flight to safety; as shown in the chart below the cash index has been largely flat for the past 2 weeks. ”
VIX futures are consolidating after the last two days of upside moves. VIX has awakened and on a buy signal above the 50-day Moving Average at 18.36. The next couple of days may experience a sideways consolidation as it acclimates to its newfound strength. The Cycles Model suggests a possible breakout above the Cycle Top in the next week.
Today is options expiration for the VIX. Next Wednesday’s op-ex shows the Shorts regaining some of their courage beneath 18.00 while the longs appear to have fallen asleep. This may lend itself to a possible explosive situation as investors’ and dealers’ guard is down.
TNX futures have risen to 38.26 this morning, while the cash market has risen to 38.00. A breakout may occur, as Friday’s high may be exceeded. This may be followed by a newfound trending strength through the rest of this week.
Japanese Yen futures have fallen to 68.89 this morning, breaking beneath Intermediate support at 69.41 and possibly targeting the 50-day Moving Average at 68.41. The average retracement (50%) may lie near 66.68. The retracement could easily be complete by the end of this week, according to the Cycles Model. Time is running out to unwind the Yen carry trade.
Crude oil futures may be completing its retracement at the 50-day Moving Average at 73.16 today, as it has risen this morning to 72.48 thus far. The reversal to a new low may take about three weeks. The neckline of the Head & Shoulders formation warns that, once beneath it, there are no visible supports until the H&S target may be reached. Hedge funds and speculators are short oil. Do they know something we don’t?