SPX futures declined to 6600.00 before bouncing at round number support as optimism about progress in the Middle East fades. It has been 100 days since the tech peak, 57 days since the broader SPX peaked. The turmoil under the surface has been awful, yet the SPX has only declined (at yesterday’s close) by less than 6%. Volatility has been suppressed, keeping the fear factor relatively low. Single stock liquidity has all but disappeared, inducing hedge funds to use broader-based ETFs to make their moves. Are thing about to change?
Today’s options chain shows Max Pain at 6610.00. Long gamma dominates above 6625.00 while short gamma gains a clear advantage beneath 6580.00.
ZeroHedge reports, “It’s Day 27 of the war: stocks and bonds fell globally as ceasefire optimism fades given mixed messages on progress toward ending the war in Iran and growing uncertainty over Iran’s willingness to engage in talks about a ceasefire in the Middle East sent oil prices higher.”
The premarket VIX rose to 27.84 this morning as VIX resumes its rally with the neckline of the head & Shoulders formation in view. The Cycles Model shows the VIX rising in strength over the next two weeks.
The April 1 options chain shows Max Pain at 21.00. Short gamma has a wall of puts at 20.00 while the call walls are at 25.00, 28.00 and 40.00.
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