SPX futures declined to 7512.90 this morning, beneath the 7-month upper trendline. Support lies at the Cycle Top at 7400.63, where a bounce may develop. The uptrend is not broken. A possible break in the uptrend may lie at Intermediate support at 7336.00. We may expect weakness for a week or so, then a resumption of the uptrend. Two down candles have commentators speculating that the market may be suffering from exhaustion.
Today’s options chain shows Max Pain at 7565.00. Long gamma begins above 7600.00 while short gamma is strong beneath 7530.00.
ZeroHedge reports, “US equity futures are weaker, dragged lower by Tech after a disappointing outlook from Broadcom triggered doubts that the blistering rally in technology shares had gone too far, a move exacerbated by euphoric positioning.”
The premarket VIX is beginning to rise out of its consolidation, reaching 16.80 this morning. There is no sign of panic in the price movement
The June 10 options chain shows a solitary spike of short gamma at 15.00. Long gamma begins at 16.00 but only extends to 25.00. There is no great expectation here.
The US 10-year Bond Yield retreated from its Cycle Top resistance this morning, continuing its consolidation. A decline beneath the 52-day Moving Average signals a further decline. A possible target may be either round number support at 43.00 or the mid-Cycle support at 42.02. The Master Cycle may be extended for another week.
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