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.
8:00 am
Good Morning!
SPX futures have risen to 6487.40 thus far this morning, above its August 13 high. Cycle Top resistance lies at 6507.36. The Cycles Model indicates that time is running out for this uptrend. Investors prefer stocks over cash despite the all-time highs. That means there are fewer buyers, or maybe none at all, to cushion the inevitable correction. The Cycles Model posits this is the last possible week for the uptrend. In addition there is an indication of rising volatility associated with reversals. Should that be so, there is a high probability of a decline to the end of September. The uptrend trendline is at 6400.00, beneath which a sell signal may be made.
Today’s options chain shows Max Pain at 6440.00. Long gamma resides above 6500.00 while short gamma lies beneath 6400.00.
ZeroHedge reports, “US equity futures are slightly higher , hovering near all time highs as traders bet that data on Friday will bolster the case for interest rate cuts even as the latest BofA card data hints at a big beat in today’s retail sales print (see preview here); tech stocks lag. As of 8:00am S&P futures are 0.2% higher following back-to-back record closes earlier in the week, with Nasdaq futures modestly in the red after incremental headlines since yesterday’s close which were net negative, with soft guidance from AMAT on uncertain macro environment in Semis and weaker China activity data. Pre-market, NVDA fell 0.3%, with the rest of Mag 7 moving higher; Health Care and Financial are outperforming. Intel rose more than 3% in premarket trading on a report that the US government may buy a stake in the struggling chipmaker. US Treasuries are mixed, with the yield on two-year notes falling one basis point to 3.72%. The yen led gains among major currencies against the dollar as the greenback weakened 0.3%. Commodities are mixed, with precious metals higher and base metals lower. Today, key macro focus will be Retail Sales and Trump-Putin Summit.”
VIX futures are consolidating near the low at 14.30. Today is monthly options expiration for the SPX in the largest August expiration ever. SPX calls outpace puts by a wide margin, suggesting that their expiration may release the VIX from its floor. 0DTE traders may dominate today’s trading, chasing after momentum moves into the close.
The August 5 options chain shows Max Pain at 19.50. Short gamma is heavily weighted beneath 18.00, while long gamma strengthens above 25.00.
TNX is hovering beneath resistance at 43.30 – 43.53. There is a risk of an imminent breakout above that level. The Cycles Model indicate a high probability of rising rates through the end of September. Should that be so, the Head & Shoulders formation may be engaged. Retail sales are coming in strong, snuffing the hopes of an imminent rate cut.
USD futures are testing the 50-day Moving Average at 98.16 this morning. The Master Cycle has made its low on August 13, suggesting a breakout may be imminent. Note: A further low is possible, with a reaction/reversal to follow.
Bitcoin futures may have made their all-time high at 124,532.70 yesterday. It has since pulled back, but stopped short of a key support at 117672.63. An aggressive sell signal may be made beneath that level. Note that the 50-day Moving Average lies at 114897.00, where a confirmed sell signal may reside. Should a sell signal be triggered, a decline to early September may occur. The Cycles Model suggests a double dose of strength/volatility may be imminent.