February 3, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

10:45 am

SPX has bounced above the 50-day Moving Average at 5987.00.  Should it retain its perch above the 50-day , there is a possibility to continue rallying to a new ATH near 6200.00.  Alternatively, a decline back down to the trendline at 5900.00 may limit the rally to near- 6000.00.  Fortunately, the issue may be resolved in just a matter of days.

 

10:13 am

BKX has fallen beneath the trendline at 136.00, crating a sell signal.  The 50-day Moving Average lies at 133.15, signaling further price erosion   There seems to be no direct connection between Trump’s tariffs and the BKX.  However, we cannot ignore that there is something weakening the banking index.

 

8:00 am

Good Morning!

NDX futures fell to 20839.80 this morning, beneath the 50-day Moving Average at 21267.68.  There is a bounce that may alleviate the fear of loss as the markets attempt to regain the 50-day.  However, a further plunge to the 100-day Moving Average at 20697.67 may elicit a panic-selling response.  The 15-month trendline is at mid-Cycle support at 20012.92.  We may continue to see wide-ranging choppiness until Wednesday, the next Cyclical Pivot day.  It is hoped that Trump’s trade war will be short-lived.

Today’s options chain shows max Pain at 21400.00.  Long gamma may begin above 21450.00 while short gamma lies beneath 21290.00.

 

SPX futures tumbled to 5908.40 before a bounce.  It remains beneath the 50-day Moving Average at 5987.02, a cause for concern as it offers a well-recognized sell signal for traders.  Should the decline resume, the 100-day Moving Average and 15-month trendline lie at 5881.06, offering a break in the trend.

Today’s options chain shows Max Pain at 6065.00.  Long gamma may begin above   6075.00 while short gamma lies beneath 6050.00.  Dealers must see SPX rise 100 points above its present position to regain neutral ground.

ZeroHedge reports, “US equity futures tumbled as the market prepares for Trade War 2.0, with both tech and small-caps underperforming as the dollar soared more than 1% pre-mkt, trading near a two year high and the yield curve bear flattens after Trump announced tariffs on Canada, Mexico and China, and warned that European levies are coming. The Canadian dollar fell to its lowest since 2003 and the euro weakened. As of 8:00am ET, S&P futures are down 1.7%, but off session lows having tumbled as much as 2% earlier; Nasdaq futures slide 1.7% with the Mag7 all broadly lower (GOOGL -1.8%, AMZN -2%, AAPL -1.9%, MSFT -1%, META -2%, NVDA -3% and TSLA -3%). Pre-mkt, Mag7/Semis are providing no safety and Cyclicals ex-Energy are under pressure as the market analyzes whether “Trade War 2.0 ushers the end of US Exceptionalism” according to JPM. The 2Y yield is +7bps pre-mkt as the bond market forecasts an inflationary impulse from the tariffs, indicating the market is not selling off on growth but rather on inflationary fears. Trump is said to have calls scheduled with Canadian and Mexican leaders today but warns that tariffs will be implemented on Tuesday if no deal is achieved; sets EU as the next target. Today’s macro data focus will be on ISM-Mfg, Vehicle Sales, and Construction Spending.”

 

VIX futures ramped up to 20.41 in early trading.  It remains beneath last Monday’s peak, but not by a lot.   The Cycles Model shows VIX receiving a triple boost of trending strength this week, sending it to possible new highs.

The October 5 options chain shows a solitary short gamma holding at 15.00.  Long gamma edges out the shorts at 16.00 and runs strong to 30.00.

 

TNX has no appearance of being affected by the Trump tariffs.  It is hovering just above the January 30 low at 44.88.  The Cycles Model shows no particular activity this week, although it may change by the weekend.

 

Bitcoin slipped beneath its double support at 99807.98 on Friday.  This morning it continued its decline, slashing through the 100-day at 63895 and bouncing off the 5-month trendline at 90000.00.  It has since bounced above the 100-day, but remains distant from the super-support at 99813.98.  Should it fail to gain traction, we may see Bitcoin challenge the trendline by the end of the week.

 

USD futures ramped above the Cycle Top at 109.42.  It may find support there, as today is a day of trending strength.   The Cycles Model suggests that USD may continue to rise until mid-March.  Tariffs may be self-defeating, as the currency of the exporting country may lose value, negating the price hike imposed by tariffs.

 

 

 

 

 

 

This entry was posted in Published. Bookmark the permalink.