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.
8:45 am
Good Morning!
SPX futures topped out at 6463.80 this morning, meeting resistance there. It has accomplished a 70% retracement. While it may go nominally higher, the retracement may be complete by early morning. An alternate view assumes that the SPX may hover near its high retracement until Friday morning. The ending diagonal trendline lies just above Intermediate support at 6430.00 where a sell signal may be found.
This morning’s options chain shows Max Pain at 6445.00. Long gamma may begin above 6450.00 while short gamma resides in strength beneath 6415.00.
ZeroHedge reports, “US equity futures are higher, extending yesterday’s gains, while the global bond rout is put on hold for the time being as traders boost wagers on a faster pace of US interest-rate cuts ahead of Friday’s pivotal jobs report. As of 8:00am ET, S&P futures are 0.1% higher, pointing to a back-to-back advance, and Nasdaq futures gain 0.25%, with Mag 7s mostly higher premarket as AMZN and TSLA add 1.3% and 1.4%, respectively. Advances were stronger in Europe, where the Stoxx 600 strengthened 0.6% and French bonds led gains across the board. Treasuries extended gains, with the yield on 10-year notes falling two basis points to 4.19% while the USD is higher. Commodities are mostly lower; oil -1.2%; gold -0.6%. Overnight, not a lot of major headlines in the US as investors are waiting for the 2x major catalysts this week (Broadcom earnings today after the close, and NFP tomorrow). Today we get the ADP Employment report at 8:15am ET (68k survey vs 104k prevsious) and ISM Services at 10am ET today (50.9 survey vs. 50.1 prior).”
VIX futures retreated to a low at 16.13 this morning and remains hovering near the 50-day Moving Average at 16.31. VIX has made a buy signal on Monday. The cost of hedging is low and should be taken into consideration.
The September 10 options chain shows short gamma at 16.00 while long gamma rises at 17.00. Long sentiment tapers off at 25.00.
TNX futures have declined to a morning low at 41.70, which is beneath the “Triangle” trendline. The Cycles Model infers a possible month-long decline to the Cycle Bottom at 41.00, or somewhat lower. In the meantime, bond volatility (MOVE) has widened dramatically. This may be a warning that investors are getting nervous. A narrowing of the trading range may lead to a very large move in either direction.
Bitcoin futures have stalled at the 100-day Moving Average at 111772.00. Stay alert for a possible rally above that level an a subsequent test of the 50-day Moving Average at 115611.00.
Gold futures have risen to a new all-time high at 3621.60 while the US cash market rose to 3578.41. The potential for war in Europe is putting a premium on the futures market. However, gold may be at the end of its current Master Cycle and may be due for a significant correction.