SPX futures are in decline, having plunged to 6778.10 thus far. The sell-off may intensify through the weekend before the next bounce. The decline may last up to 2 more weeks before any relief may be seen. (More commentary later.)
A decrease in payrolls and increased hardship have brought another risk to the fore. The steady inflow of pension and 4001(k) contributions may be dwindling. ZeroHedge comments, “My readers know that for the last couple of years I’ve repeatedly warned about the “passive bid” in markets. By that I mean the constant, automatic buying of stocks driven by retirement plans, ETFs, and other systematic investment programs.”
Today’s options chain shows Max Pain at 6845.00. Long gamma begins above 6875.00 while short gamma becomes strong beneath 6825.00.
ZeroHedge reports, “Seven days into the war on Iran and markets are getting increasingly shaky. US equity futures tumbled ahead of the February jobs report, and are on pace to close the worst week for global markets since 2020 deep in the red as the selloff in global bonds deepened after another jump in oil prices fanned fears that the war in the Middle East is fueling inflation. ”
Further news from ZeroHedge, “In our nonfarm payrolls preview, we quoted JPMorgan’s Market Intel desk which said that “for this print, the stronger the better”, which by implication means that a poor number would be bad. By that logic, the actual number couldn’t be any worse, because moments ago the BLS reported that in February, the US lost 92,000 jobs, a huge drop from the downward revised (of course) 126K in January, and the second worst print since 2020 (only October’s shock -140K was worse). The number of private payrolls dropped by 86K, also a huge miss to estimates of a 60K increase.”
The premarket VIX rose to 28.25 this morning. The neckline of the Head & Shoulders formation goes into play above 28.15. Should it open above it, consider this a confirmed buy signal for the VIX. Although investors have been relatively calm about the prospects of a war disrupting the global economy, they remain cautious thus far. However, stress is increasing.
The March 11 options chain shows Max Pain at 20.00 in a brutal contest. Short gamma is increasing beneath 19.00 while long gamma remains clustered beneath 25.00.
The DJIA has declined beneath its neckline, activating the Head & Shoulders formation.
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