The Practical Investor

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.

9:00 am

Good Morning!

SPX futures rose to 6659.70 “on news that Nvidia will invest $5BN in Intel at $23.28 per share.”  Yesterday’s dip was shallow enough to allow a new all-time high this morning.  The Cycle Top resistance lies at 6678.56, which imposes a possible upper limit on the rally.  Dealers may be motivated to bring SPX futures down beneath long gamma at 6620.00, or face having to buy shares in an overcrowded, overbought market.  This may  complete the bullish fractal and allow a deeper correction.  The Cycles Model May allow another week of rally, but SPX has entered its turn window, allowing a reversal forthwith.  A decline beneath the trendline and Intermediate support at 6450.00 offers a sell signal.

Today’s options chain shows Max Pain at 6600.00.  Long gamma becomes dominant above 6620.00 while short gamma reigns beneath 6590.00.

ZeroHedge reports, “Futures are higher and back into record territory as investors shrug off some contradictions in the Fed’s policy statement and Powell’s hawkish news conference and refocus on the most dovish Fed statement since 2021, per JPM. “For whatever reason, it appears the Fed’s reaction function has shifted in a more dovish direction,” according to Bloomberg Econ head Anna Wong. S&P 500 futures were 0.8% higher at 8:05 am ET while Nasdaq 100 futures were +1.1%. Pre-mkt, Mag7 / Semis are bid up with NVDA +2.3%, AVGO +1.9%, TSLA +1.6%, GOOG +1.3%; tech was boosted by news that NVDA would buy a $5BN stake in rival chipmaker Intel.  Nikkei +1.15%, Hang Seng -1.35%, Shanghai -1.15%, FTSE +15bps, CAC +1.1%, DAX +1.2%. “Last night the market was taking the view that this wasn’t so much of a dovish cut but, after sleeping on it, it decided that it was enough to keep the market going,” said Karen Georges, an equity fund manager at Ecofi in Paris. “Fed cuts are good for tech and long duration stocks.” Sure enough, both tech and small caps are outperforming as the US is poised for an “Everything Rally” alongside a global risk-on tone. The yield curve is bull flattening and USD is flat. Large-Caps across all the super-sectors are higher pre-mkt. Today’s macro data focus is on jobless claims where investors will look to confirm last week’s spike was a one-off.”

VIX futures corrected down to 14.33 this morning, possibly completing its two-week correction.  What may follow is a breakout above the 4-month trading channel that has been bouncing off the “floor” of the VIX trading range.  This action may offer a n opportunity to accumulate hedges against what may follow.

TNX is challenging the Triangle formation trendline after a strong reversal out of a possible Master Cycle low on Wednesday.  The trendline lies between 41.10 and 41.20.  A rally above that level confirms a buy signal for TNX (a sell signal for UST).  Should the rally continue, investors may become less confident in equities.  Meanwhile, money flows into commodities suggest a rising concern about inflation.

Bitcoin resumed its rally, but remains overbought.  There are approximately two weeks left in the current Master Cycle, leaving open the option of going higher.  The Cycles Model allows Bitcoin to advance to the Cycle Top resistance at 128546.10.  However, Bitcoin has reached the 61.8% Fibonacci retracement value this morning, suggesting a possible early reversal.

USD futures are climbing toward the 50-day Moving Average at 97.98, above which a buy signal may be obtained.  The USD reached its Master Cycle low on Wednesday, making a very strong reversal.  The Cycles Model infers a probable rally to mid-October.  During that time, the USD may break out of its declining trend channel, defined by the trendline at 99.00.

Gold futures may have reached their Master Cycle high yesterday at 3705.71.  Since then it has been in a sharp decline.  This action offers a possible aggressive sell signal.  Unfortunately, it may not be confirmed until gold declines beneath Intermediate support at 3454.89.  The Cycles Model may allow the subsequent decline to last until mid-November.  This infers a possible decline to the Cycle Bottom at 2602.32.

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.

10:30 am

The Ag Index is due for a correction alongside stocks, but may not have the depth of decline that may be expected in stocks.  A possible target may be the Cycle Bottom at 338.00.  This decline may offer an opportunity to accumulate shares of agricultural commodities.

ZeroHedge observes, “Arabica coffee futures have soared over the past six weeks, reaching their highest level since February as traders closely monitor tightening supplies, adverse weather conditions in Brazil and other top growers, and uncertainty surrounding upcoming harvests, which has fueled a short squeeze.”

ZeroHedge further notes, “The best bang for the buck in the grocery store protein aisle this year hasn’t been beef, it’s been eggs. Prices have plummeted thanks to President Trump’s swift action to fix the Biden-Harris regime’s botched bird flu culling disaster. By contrast, ground beef has surged to a record $6.32 per pound, squeezed by the smallest US cattle herd in decades, with a bleak outlook despite some signs of a rebuilding phase nearing.”

8:45 am

SPX futures consolidated beneath yesterday’s high, waiting for the FOMC announcement.  The Cycles Model offers two possibilities today, both start with a decline.  The first option may be a decline beneath the 50-day Moving Average at 6393.59, reaching possible support near the mid-Cycle support at 5986.22.  That option leaves the door open for a subsequent new all-time high in October.  The second option may be a deeper, panic decline to the April 7 low, leaving a possible retracement in October, with no new all-time highs.   The reason for the second option is that the Cycles Model projects several days of volatile strength starting next week.  In addition, the panic decline may extend into earnings season in early October.

Today’s options chain shows Max Pain at 6610.00.  Long gamma resides above 6625.00 while short gamma dominates beneath 6590.00.  Options are on a hair trigger.

ZeroHedge reports, “US equity futures are flat into today’s Fed decision, with the long end of the yield curve moving lower. As of 8:10am ET, S&P and Nasdaq futures are down 0.1%, with Nvidia lower in premarket trading after the FT reported that China has ordered some companies to terminate orders for a certain type of AI chip (AMD -1%, AVGO flat). Other Mag7 names are flat. Cyclicals are under pressure. In other assets ahead of the Fed, the dollar is near its lowest level in three years although it is catching a bid after losing nearly 1% the last two days, while gold held near a record high. The commodity complex is weaker with notable losses in silver and coffee, each down more than 2.2%. In addition to the Fed today, we also have Housing starts and building permits ahead of tomorrow’s jobless data.”

VIX futures remain above the 50-day Moving Average this morning.  The leap above the 50-day yesterday gave the VIX an early buy signal.  Most analysts may recognize the buy signal above the declining trendline near 20.00.  The Cycles Model suggests a rally may be imminent, with trending strength emerging next week.  The current Master Cycle may extend into earnings season in October.

TNX is drifting lower as the FOMC announcement approaches.  The Cycles Model suggests that the current decline may last to the end of September with rising volatility.   A .25% rate cut may already be “cooked in,” but investors may pay attention to dissenting voices in the FOMC.  A further decline next week may be due to the potential loss in confidence in the economy, motivating investors to switch to bonds, a traditional “safe haven.”  The wording in the FOMC statement may be studied carefully for nuances.

ZeroHedge reports, “After 3 stellar coupon auctions last week, with 10Y yields trading effectively at the lowest level since last October (excluding the Liberation Day basis trade freak out) , and with the Fed set to cut by at least 25bps, there was little anxiety ahead of today’s 20Y coupon auction. And with good reason: moments ago the day’s coupon auction, a reopening of the 19-Year, 11-Month cusip UN6, went without a glitch in what was a very solid auction. ”

Bitcoin futures remain above the 50-day Moving Average at 114500.00.However, it is overbought and susceptible to weakness.  Should it decline beneath the 50-day, there could be trouble for the longs.

USD futures may have made their Master Cycle low yesterday.  Should that be so, the new Master Cycle may be on the rise to mid-October.  Should that be so, a breakout of the declining channel may occur in the next week.  The Master Cycle projects the new trend to last to mid-October with rising strength.  A potential target may be no less than the mid-Cycle resistance at 101.58.

Gold futures rose to 3732.80 yesterday, hitting a new all-time high.  Likewise, the CME price may have also topped out yesterday in an extended Master Cycle.  The Cycles Model suggests a decline may ensue, lasting to mid-November.  The decline may begin to accelerate next week, with volatility peaking at month-end.

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.

10:20 am

BKX may have hit its all-time high on Monday at 152.51.  It has since reversed, although no signal has been given.  A confirmed sell signal may emerge at the decline beneath the 50-day Moving Average at 145.43.  Should the decline materialize, it may not conclude until the end of October.

8:00 am

Good Morning!

SPX futures rose to 6634.70 this morning before easing back, remaining above yesterday’s high.  The rally may be in its end stage and due for a corrective decline to the end of the month.  What happens after may depend on the depth of the correction.  The FOMC decision on rate cuts may not be the only catalyst for the decline, although expectations for a deep cut run high.  NDX has had a 10-day run of gains as of yesterday.  The all-time record, I believe, was 13 days.

Today’s options chain shows Max Pain at 6600.00.  Long gamma rises above 6630.00 while short gamma dominates beneath 6575.00.

ZeroHedge reports, “US equity futures are higher (duh) outperforming global counterparts, while the Nasdaq is on pace for a historic 10th day of gains. As of  8:00am ET, S&P and Nasdaq 100 futures were higher by 0.2% with Oracle rising more than 5% in premarket trading on news it may soon be handed control of TikTok. S&P 500 contracts edged higher after the US benchmark powered through the 6,600 mark on Monday. Pre-mkt, Mag7 is displaying strength across multiple members with add’l TMT support from AVGO (+1.4%) and ORCL (+3.7%). Cyclicals and Semis are poised to lead but with pockets of strength in Defensives (HC, Staples) also seen. Europe’s Stoxx 600 fell 0.2%. Bond yields are flat to down 1bps with the US Dollar broadly weaker ahead of a widely expected 25bp cut and the resumption of the Fed’s easing cycle which paused in Dec 2024 (right after Trump was elected). US Treasuries have been racing past peers, the euro is nearing four-year highs and Goldman strategists caution that the next pain point for bond traders may come in the five-year part of the curve.  Both Cook and Miran will be a part of the vote. Today’s macro data focus is on Retail Sales where Feroli is below the Street seeing a 0.1% MoM print and 0.3% for the Control Group.”

VIX futures are consolidating beneath the 50-day Moving Average at 15.92 this morning.  The 50-day may be a trigger point for a buy signal in the VIX.  Investors are selling SPX puts in an effort to derive a profit from the collapse in volatility.  This extreme behavior is due to backfire very soon.

Tomorrow’s (monthly) options chain shows Max Pain at 18.50.  Short gamma rules beneath 16.00 while long gamma rises above 20.00.

TNX appears to be consolidating beneath the Cycle Bottom at 40.64.  The Cycles Model suggests a shot of strength may be due today.  How it manifests itself may indicate whether the decline continues lower, or an early reversal may be in the works.

ZeroHedge remarks, “In 2025, the mainstream Keynesian narrative that the United States would inevitably experience a recession and stagflation has proven to be utterly incorrect.

The American economy is performing much better than its comparable nations, is showing broad-based strength, and even has indications of accelerating growth, giving investors and consumers plenty of reason to feel more optimistic, despite the consensus estimates from earlier in the year.

The consensus was wrong.”

BTC managed to break above the 50-day Moving Average at 114570.00, but is currently in overbought territory.  The Cycles Model opens the door to a 3-week decline that, should Bitcoin decline beneath the 50-day, it may test the mid-Cycle support at 104223.95, or possibly lower.

USD futures may be due to reach their Master Cycle low within the next day or two, as projected.  Be aware that this may have ramifications across the board.  The Cycles Model suggests the reversal may be imminent, with a possible rally in the USD to mid-October.

Gold futures overshot the Cycle Top resistance at 3704.00, reaching a high at 3737.00 this morning.  It may be in the final stage of its extended rally.  A reversal beneath the Cycle Top support/resistance may signal a change in trend.  The Cycles Model suggests a decline may ensue to mid-November.

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 rose to 6600.10 thus far, testing Friday’s high at 6600.21, which is round number resistance.  Last week hedge funds become buyers of AI after the CPI print.  Meanwhile, this week stock buybacks went into their blackout period.  The current Master Cycle may be due for a downside correction that, at a minimum, may test the 50-day Moving Average currently at 6378.27.  A warning that the decline may undershoot the mean (50-day) infers a possible further decline to the mid-Cycle support at 5980.28.  In other words, the SPX is so far extended that a simple “reversion to the mean” may not be sufficient to relieve the overbought condition.  The week of September 22nd may be particularly brutal.  The 1987 trendline at 5800.00 may be another possible target for the correction.  The Cycles Model suggests the correction may last to the end of September.

Today’s options chain shows Max Pain at 6575.00.  Long gamma resides above 6600.00 while short gamma strengthens beneath 6550.00.

ZeroHedge reports, “Equity futures are at fresh record highs, erasing a modest dip earlier in the session when a probe found that Nvidia violated anti-monopoly laws in China in a 2020 deal. That killed the mood at the start of a big week, with the Fed expected to make the first of a series of rate cuts, however the mood was promptly lifted again just after 6am ET when Elon Musk bought $1BN in TSLA stock sending the market cap soaring by over $100BN and lifting stocks to new all time highs. As of 8:00am ET, S&P 500 futures and Nasdaq 100 futures were higher by 0.2%. In premarket trading, Nvidia shares fell as much as 2.9% after China said it violated antitrust regulations after its acquisition of Mellanox. The surprise announcement came as US and Chinese officials headed into a second day of wide-ranging negotiations in Madrid over tariffs. Mag7 names are mixed with AAPL, AMZN, and GOOG up 90bp-108bp; TSLA soared 8% after Musk purchased $1bn of stock, his first open market purchase since February 2020. European stocks advanced in a rally led by luxury shares. US / China trade talks enter a second day today. Commodities are mixed with Energy up and Ags / Metals down. Today’s macro data focus is Empire Mfg ahead of tomorrow’s Retail Sales and Weds’ Fed meeting.”

VIX futures rose to a weekend high at 15.31.  The 4-month period of calm may be broken this week, leaving investors unprepared and unhedged.  Note that the 50-day Moving Average is at 15.94, suggesting that hedges are still cheap.

The September 17 (monthly) options chain shows Max Pain at 18.50.  Short gamma rules from 15.00 to 18.00.  Long gamma dominates above 20.00 with institutional participation at every 5 points to as high as 80.00.

TNX may have been repelled at the Cycle Bottom resistance, suggesting another probe lower may be taking place.  Should that be so, additional strength may be imminent, lengthening the decline.  The Cycles Model suggests up to 2 weeks of additional decline before it hits bottom.  Note that the FOMC announcement on Wednesday may provide the impetus for an early reversal.  The market may be pricing in a .25% cut in September, rising to a .50% cut in October.

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.

8:15 am

Good Morning!

SPX futures rose to 6551.50 and are hovering just beneath yesterday’s all-time high.  Trading volume is taking a pause as evaluate where the economy is tracking.  Yesterday’s deflationary PPI report cemented the odds of a .25% rate cut while the upcoming CPI report may “lock in” a .50% rate cut.  All of this comes to a head next Wednesday at the FOMC decision.  The Cycles Model offers no direction until the week after the FOMC, when the market heats up for the end of the quarter rebalancing.

Today’s options chain show Max Pain at 6530.00.  Long gamma may begin above 6550.00 while short gamma rules beneath 6475.00.

ZeroHedge reports, “US equity futures have a slight bid into today’s CPI print – the last key macro datapoint ahead of next week’s rate decision – rising to another daily record high, let by Tech. As of 8:10am, S&P futures rise 0.2% after back-to-back all-time highs while Nasdaq 100 futures rise 0.3% with AAPL and AMZN leading the Mag7 higher and ORCL +1.4% after its +36% move yesterday. In a familiar pattern this week, Cyclicals are outperforming Defensives pre-mkt. European stocks also drifted higher while Chinese stocks capped their biggest advance since March, led by companies seen as major beneficiaries of the nation’s push for homegrown technology. Treasuries held steady, with the 10-year yield at 4.05%; the USD is up small as the yen slumps after prominent LDP dove and conservative Sanae Takaichi said she is running for PM; commodities are seeing some profit-taking with both Energy and Metals lower. CPI and Jobless Claims are the focus for today as investors solidify views into next week’s Fed as well as Oct / Dec meetings.”

VIX futures dipped to 14.97 in the overnight market.  Yesterday’s low at 14.63 may have given a turning point for the VIX, as the fractal appears complete.

TNX futures hit a new low at 39.91 this morning, but pulled back presumably at the news of the CPI.  TNX has about two more weeks to go in the current Master Cycle, giving it the possibility of declining to the April 4 low.

ZeroHedge reports, “After yesterday’s remarkably strong 3Y auction, which in our view was one of the “top 3″ best 3Y sales in history, moments ago the US Treasury sold 10Y paper (in a 9-Year 11-Month reopening) in what may well be one of the “top 3″ 10Y auctions too.

Starting at the top, the auction priced at a high yield of 4.033%, down significantly from 4.255% last month, and the lowest since last September, when the market suffered another growth scare and the Fed ended up cutting by 50bps just a week after a similar 10Y auction priced. And just like the Sept 2024 auction, this one also stopped through the When Issued by a solid 1.3bps: this was the highest stop through since the market chaos in April.”

Bitcoin futures have stopped short of the 50-day Moving Average at 114787.00 this morning.  The Cycles Model proposes a possible three more weeks in the currnent Master Cycle which should allow it to exceed the 50-day.  However, the prospects of a new all-time high are diminishing.

USD futures are consolidating beneath their 50-day Moving Average at 98.89.  The Cycles Model allows another week of decline, which may test the lower trendline near 95.00.

Gold futures made a new all-time high at 3687.42 this morning in Master Cycle overtime, touching the Cycle Top at 3686.84.  The Cycles Model suggests this may be the final probe, as it hit its Cyclical target.  Caution is advised as

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.

10:20 am

BKX has made its Master Cycle high last Friday and is consolidating beneath it.   What is worrisome is that the new Master Cycle decline may extend to the end of October.   What is emerging is $1.3 trillion of CRE loans that need refinancing under rugged circumstances.  Last year’s $2.5 reverse repo facility is now at zero.  Difficult times lie ahead for regional banks.

8:15 am

Good Morning!

SPX futures made a new all-time high at 6540.10 this morning.  It may be in a correction phase which may allow a shallow decline similar to the January correction at any time.  While the main support is the 50-day Moving average at 6355.48, it may be possible that the mid-Cycle support at 5972.08 may be tested by the end of the month.  Meanwhile, the source of funds seems to be primarily from Europe as the prospects for a hot war are increasing.  Analysts are crediting Oracle for the bump in price.

Today’s options chain shows Max Pain at 6505.00.  Long gamma becomes strong above 6525.00 while short gamma may begin beneath 6500.00.

ZeroHedge reports, “US stock futures are trading at another record high, with European and Asian also pushing higher after Oracle underpinned the strong sentiment in tech with blowout guidance sending its shares up by 30% in premarket trading, while the market awaits inflation data today and tomorrow. As of 8:15am, S&P futures are 0.3% higher with Nasdaq futures rising 0.4%…”

VIX futures declined to 14.85 this morning, as SPX continues to rally.  However, today offers the possibility of a reversal with strength.  A bounce above the 50-day Moving Average at 16.04 may begin a sharp rally.  Today is options expiration, which may release some of the propensity for decline.

TNX futures are heading lower this morning.  The question, “Who benefits?” arises as the US government is the largest borrower in short-term loans.  Long term rates may be subject to inflationary pressures as government soaks up even more liquidity.

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.

7:45 am

Good Morning!

SPX futures rose to 6516.20this morning, then settled back near 6500.00, leaving Friday’s all-time high intact.  The trendline is near 6475.00, beneath which a possible sell signal lurks.  The Cycles Model suggests a possible decline to the end of the month.  Should that be so, the April 7 bottom is a likely target.  Institutions are on the sidelines to the end of the quarter while hedge funds are reducing leverage.  Commercials and individual investors may be maxed out at this level.   The breakaway decline may gain strength by the end of the week.  A possible panic Cycle  may emerge the week of the 22nd.

Today’s options chain shows Max Pain at 6485.00.  Long gamma exists above 6500.00.  Short gamma lies beneath 6450.00.

ZeroHedge reports, “Futures are higher led by Tech as expectations of Fed rate cuts continued to drive gains, while Treasuries eased after a rally that pushed global bonds into bull-market territory ahead of what is set to be another huge negative benchmark revision to payrolls. As of 8:30am S&P futures are 0.1% higher, while Nasdaq futures gain 0.2% as Mag7 stocks see a muted bid with AVGO/NVDA leading Semis higher. Both Cyclicals and Defensives have caught a bid with Materials buoyed by the Anglo / Teck deal. The yield curve is bear steepening as 10Y yield rise by 2bps to 4.07%; the dollar slid for a third day, with the yen driving advances among major currencies on renewed signals of policy tightening by the Bank of Japan. Commodities are higher with broad-based strength across all 3 complex but notable increases in crude, natgas, coffee, and iron. Today’s macro data focus is on the NFP revision with BBG survey seeing a 700k negative revision to payrolls and the modest beat in the NFIB Small Business Optimism (100.8, vs Exp. 100.5) where the Hiring sub-index has been a leading indicator for future NFP prints.”

VIX futures are consolidating beneath the 50-day Moving Average at 16.07.  A good place to accumulate shares.

Tomorrow’s options chain shows short gamma strongly beneath 14.00 while long gamma kicks in above 15,00.  Large investors are starting to nibble at long positions in the 40.00-50.00 range.

10-year Treasury futures are bouncing from yesterday’s low, but may be held down at the Cycle bottom at 40.94.  The Cycles Model suggests the decline may exceed the April 4 low.  Money flowing into bonds may accelerate over the next three weeks.

Gold futures hit a new all-time high at 3698.52 in the overnight market.  The CME (cash market) may be struggling near 3600.00 at the same time.  Round numbers give a high resistance quotient and may be the end of the rally in gold, just as sentiment and participation reach a fever pitch.

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.

8:15 am

Good Morning!

SPX futures rose to 6500.90 this morning, a 61.8% Fibonacci retracement.  Market breadth is at its lowest point in years, as Commercial traders have maxed out their allocation.  Retail investors are trying to ascertain whether the Fed has launched a new rate-cutting regimen or will the cut be simply a one-off phenomenon.  The largest market drivers in the AI movement are in a funk.  Finally, buy-backs are in a blackout period to the end of quarterly earnings season.  What can possibly go wrong?  The Cycles Model suggests a decline to the end of September with a possible target being the April 7 low.

Today’s options chain shows Max Pain at 6480.00.  Long gamma resides aboe 6500.00 while short gamma lies beneath 6450.00.

ZeroHedge reports, “US equity futures are higher ahead of today’s French vote of confidence which should end the Bayrou government, and into major inflation updates this week. As of 8:0am ET, S&P futures are up 0.2% and on pace for another record high after Friday’s post payrolls drop; Nasdaq futures gain 0.4% with all Mag7 names higher premarket, ex-AAPL which is flat into its product event tomorrow. Large caps are higher across virtually all sectors. In overnight news, US is reportedly considering annual export approvals to chip facilities in China. The yield curve is twisting steeper and the DXY is flat as USD / JPY appreciates after PM Ishiba announced his resignation, but is well off its session highs. Commodities are stronger, led by Energy, after OPEC+ confirmed a smaller than expected production increase of 137k bpd in Oct. Gold / silver continue to run higher, with the former hitting another record high of $3622; Ags are weaker. Today’s macro data focus is on NY Fed’s 1-Yr inflation expectations and Consumer Credit.”

VIX futures have risen to a morning high at 15.64, hovering beneath the 50-day Moving Average at 16.11.   The Cycles Model calls for increasing trending strength by the end of the week.  The rally may resume to the end of September with a potential target being the April 7 high.

TNX futures are hovering above Friday’s low, but beneath the Cycle Bottom resistance at 40.98.  The Cycles Model suggests declining 10-year rates to the end of the month.  A  possible target may be the April 4 low at 38.86.

Bitcoin continues to hover near its 100-day Moving Average at 111817.00.  The key observation is that it remains beneath its 50-day Moving Average at 115513.00.  Should it remain so, the signal may be neutral.

The gold rally continues with new all-time highs today.  However, the rally is weakening and the Cycles Model suggests the rally may end soon.  While the futures may have made the Cycle Top resistance, the cash market (CME) has not.

USD futures threaten new lows this morning. the decline may continue to mid-September.  A possible target may be near 95.00, bringing back the USD bears.

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 are hovering between 6504.00 and 6522.80.  The fact that the futures made a new all-time high does not guarantee that the cash market will do the same.  There are too many variables that may affect equities.  Today’s expectation is a 75,000 print.  Anything less may justify lower rates, as the Fed is os inclined.  Thus, we wait for the August Payroll report.

ZeroHedge reports, “US equity futures are higher into NFP, rising after strong results from Broadmcom and on optimism that Friday’s jobs report will set the stage for the Fed to resume cutting interest rates this month. At 8:00am, futures for the S&P 500 ticked 0.1% higher – reaching a new record high – but eased off the best levels of the session. Nasdaq contracts advanced 0.5%. In premarket trading, Broadcom rallied more than 9% following its pact with OpenAI to create an artificial-intelligence chip. Tesla rose 2% after the board proposed a potentially $1 trillion pay package for Elon Musk. US Treasuries were little changed, with the two-year yield near the lowest in almost a year. The dollar headed for its weakest showing this week. Commodities are mixed: oil and base metals are lower, while gold and ags are mostly higher.”

8:45 am

Today’s August Payrolls were up 22,000, leaving the unemployment rate unchanged.

ZeroHedge states, “Ahead of today’s jobs report, consensus was that a print between 40K and 100K is largely priced in and greenlighting a 25bps rate cut by the Fed in two weeks, and that we would need a real outlier number for the Fed to either cut 50bps… or not hike. Well, we got a real outlier when moments ago the BLS reported that in August the US added only 22K jobs, a big drop from the upward revised 79K (from 73K previously) but more importantly June was revised from 27K to -13K, ushering in the first negative jobs print since 2020.”

The 10-year Treasury Yield dropped to a morning low at 40.91 thus far this morning.  It has declined beneath the Cycle Bottom at 40.98, indicating the possibility of a deeper decline. The Cycles Model suggests the decline may continue through the end of September.

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.