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
8:30 am
Good Morning!
SPX futures rose to 6917.0 this morning, testing Intermediate resistance at 6914.00 and possibly the trendline near 6925.00. This will be the third attempt at the trendline, as you will notice from yesterday’s 2-hour chart. As mentioned yesterday, a reversal may be imminent. Thus far, the price action has been no more than a correction for the past 28 days. It is important to know that the current Master Cycle may be less than halfway finished. NVDA earnings come at the close, which may either launch a new test of the bull market, or slam the door on the bulls.
Today’s options chain shows Max Pain at 6880.00. Long gamma inhabits the territory above 6900.00 while short gamma lies beneath 6840.00.
ZeroHedge reports, “US equity futures are higher into NVDA earnings release after the close, and the risk-on tone in the US yesterday has spread globally with tech giant’s earnings a catalyst for maintaining the rally aided by Tech.”
The premarket VIX declined this morning to 18.89 thus far. It may decline further, near 18.50 in a flat correction, or possibly as low as the 52-day Moving Average currently at 17.12. Today looks to be a possible Master cycle low, which may be impeding the decline in the SPX. The release from that low may be extraordinarily strong beginning next week.
VIX options expire today. It appears that dealers may attempt a stab at short gamma beneath 19.00, since they may be the majority holder of puts. The March 3 options chain shows Max Pain at 19.00. Short gamma lies at 17.00-18.00. Long gamma begins a call wall at 20.00 and bulges in the options chain at every 5 points to 50.00.
TNX is advancing today as it emerges from its Master Cycle low. While most analysts are giving the “all clear” message on treasuries, the Cycles Model points out a possible two month rally straight ahead. Should that occur, a likely target may be the Cycle Top currently at 44.59.
USD continues to consolidate beneath the 52-day Moving Average at 97.95. The Cycles Model calls for a possible Trading Cycle low in the next two days. The possible target may be Monday’s low at 97.35, although it may go lower temporarily. The current thinking on the street is that inflation may be contained, but the backdrop of a war emerging is making the market uncomfortable. The Cycles Model suggests that USD may become more active in March with a breakout possible in early March.
ZeroHedge remarks, “The dollar’s slide last year looks less like a sudden break and more like the culmination of pressures that have been gathering for a while.”
The Japanese Yen extended its Master Cycle low another day. However, today is also marked by the Cycles Model as “very strong.” If so, the low may not last. The new Master Cycle may continue the uptrend until mid-April. The target may be the Cycle Top at 70.45.