Market Analysis - Thursday, April 2

SPX futures declined to a morning low at 6469.40 thus far. The next phase of the decline may have begun, as all the stock indices have stopped cold at key resistance. As mentioned before, the potential target may be the Cycle Bottom at 6264.31 or the 1987 trendline near 6200.00.  That is based on my primary fractal design. The alternate design may offer a much lower target, possibly the April 2025 low.  The reason for this observation is that the new Master Cycle (decline) may extend to the end of April.

401(k) plans are under stress. ZeroHedge remarks, “Another light on America’s economic dashboard is blinking red, as money-pinched workers are cutting their 401k contribution rates. The news follows our earlier report on hardship withdrawals from the cornerstone retirement savings accounts hitting a record high. Critically, these numbers don’t reflect what workers are doing right now — amid war-driven gas price-hikes and worries about the economy.”

Today’s options chain shows Max Pain a t6580.00. Long gamma may begin above 6590.00 while short gamma strengthens beneath 6540.00.

ZeroHedge reports, “Global risk assets, including US equity futures and global markets, as well as Treasuries and precious metals, tumbled as oil soared with Brent hitting $110 this morning after Trump’s late Wednesday speech refused to pivot and dashed hopes that the Hormuz Strait would reopen soon and the war in the Middle East is nearing a swift resolution.”

The premarket VIX rose to 27.859 this morning, above the Cycle To support/resistance at 25.37. The VIX remains on a long-term buy signal despite the wide swings. The current Master Cycle runs until mid-April.

The April 8 VIX options chain shows short gamma running between 20.00 and 23.00. Long gamma begins at 24.00 and shows  institutional participation starting at 25.00 and running every 5 points to 55.00.

TNX continued its bounce from support at 43.00. Resistance lies at the Cycle Top at 44.16 which may bring TNX back down over the next several days, as the Cycles Model allows some consolidation during that time. However, the trend is higher and may be strengthened by a breakout above the neckline of the Head & Shoulders formation.