Market Analysis - Thursday, April 30

SPX futures probed down to 7104.00 in the overnight session, but bounced back above its close. The cross-currents are growing more intense as pensions are rebalancing, commercial traders and hedge funds are selling, buy-backs are increasing and retail is trading the froth. The NYSE Hi-Lo Index only shows 38 new 52-week highs after closing at 100.00 on Monday, where the SPX barely eked out a new high. The Cycles Model says the Master Cycle may be complete, with a possible reversal in the next two days, should it attempt a new high.  A sell signal may appear beneath the froth level at 7100.00.

Today’s options chain shows Max Pain at a much contested 7100.00. Long gamma may begin above 7150.00 while short gamma may be influential beneath 7080.00.

ZeroHedge reports, “Futures erase an overnight slide, and have resumed their ascent trading near all time highs, despite a hawkish Fed statement but stronger Mag7 earnings.”

The premarket VIX is chopping around near the mid-Cycle support/resistance at 18.41. The compressed volatility is at odds with the position of the SPX. The Cycles Model suggests the rally may resume imminently, with rising strength to mid-May. Quite possibly the neckline of the head & shoulders formation may be tested by then.

The May 6 options chain shows a solitary slug of puts at 17.00, while long gamma abruptly rises at 19.00 and dominates to 40.00.

USD is testing the bottom of its consolidation today. The trend is being tested. Should it hold, the USD may rise to a potential Head & Shoulders formation at 100.64. However, there may be a tendency to decline to its Cycle Bottom at 96.72 before moving higher. The Cycles Model is unclear until mid-May, when strength returns.

The US 10-year Bond Yield pulled back this morning after giving the market a scare as it appeared to be heading for a breakout. The Cycles Model suggests that TNX may drift lower over the next week or so as the war in the Middle East appears to be winding down. Should that occur, the reversal may be swift and steep.

Bitcoin bounced off round number support at 75000.00 today. The bounce may be brief as  the decline may gain momentum over the weekend. The Cycles Model indicates the probability of a decline to mid-May.