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!
SPX futures rose to 5718.60 this morning, With the port strike settled, it is not hard to see why investors view the September jobs report to be a non-event. We will soon find out. The Cycles Model suggests a brief reaction sending SPX to 5732.00.
Today’s options chain shows a highly contested Max Pain at 5700.00. Long gamma may begin at 5725.00 while short gamma starts beneath 5720.00.
ZeroHedge reports, “US futures and European stocks fluctuated ahead of today’s jobs report that will help determine the path for interest rates. As of 8:00am, S&P futures are 0.3% higher, reversing earlier losses, with small-caps leading. Nasdaq futures rise 0.4% with AMZN and TSLA notable movers in MegaCap Tech (AMZN +1.4%; TSLA +1.2%). Bond yields are higher, extending Thursday’s treasury selloff, 10-yr yields rise 3bps higher. The Bloomberg Dollar Index was slightly lower, but still set for the biggest weekly gain in nearly six months as traders pared back expectations for aggressive US rate cuts. Commodities are mixed with oil higher, base metals lower, and precious metals slightly higher. Oil prices extended their gains after Israel carried out huge bombing raids on Hezbollah targets near Beirut airport alongside ground attacks in southern Lebanon; this followed the biggest one-day jump in oil prices in almost a year amid spiraling Middle East tensions. Today, the key macro focus will be NFP release: Wall Street consensus expect a 150k print, with the unemployment rate unchanged at 4.2% (see our preview here).”
VIX futures pulled back to 18.88 as it prepared to challenge the Cycle Top resistance at 21.59. Once accomplished, it may pull back to the 50-day Moving ?Average at 18.49. The Cycles Model suggests the rally may resume in strength next week. Analysts believe that both the VIX and the SPX may rise in unison as they did in the 1990’s.
The October 9 options chain shows Max Pain moving up to 23.00. Short gamma rules between 15.00 and 20.00. Long gamma may exist above 25.00, but with little strength of conviction.
TNX Vaulted above the 50-day Moving Average at 38.47. Yesterday and today are days of trending strength that was pointed out earlier this week. The next target is the upper trendline alongside the 200-day Moving Average at 41.64. This may become Powell’s worst nightmare.
ZeroHedge comments, “It turns out that Powell’s “emergency” 50bps rate cut was – drumroll – another major policy mistake by the Fed.
Moments ago, the BLS reported that at a time when prevailing consensus was for jobs to continue their recent downward slide sparked by the near-record annual jobs revision and several months of downbeat jobs reports, in September the US unexpectedly added a whopping 254K jobs, the biggest monthly increase since March…”