SPX futures consolidated inside yesterday’s trading range. While the time element of the Master Cycle appears complete, SPX must still break the Cycle Top support at 7152.00 to produce an aggressive sell signal. What lies ahead may be a shallow (Wave B) decline that may stop at the 52-dy Moving Average or the mid-Cycle support at 6765.00 over the next 2-3 weeks. A confirmed sell signal may not be given. Instead, the decline may be the last “buy the dip” opportunity of the year. While most analysts view the market against its own past performance, the rest of the world may be looking at the US markets as a haven from the turmoil of war.
Today’s options chain shows Max Pain at 7200.00. Long gamma rises above 7240.00 while short gamma resides beneath 7165.00.
ZeroHedge reports, “Stock futures are higher, completely reversing yesterday’s drop with dip-buyers out in force as a fragile ceasefire between the US and Iran held after a day of clashes and sentiment is helped by a pullback in oil prices, with Brent crude futures down 1.4% as well as the US move to return 22 Iranian crew from a seized vessel.”
The premarket VIX is consolidating beneath mid-Cycle support/resistance this morning. The Cycles Model suggests about two weeks of rally that may meet the neckline of the Head & Shoulders formation at 35.30.
Tomorrow’s options chain shows a small contingent of puts between 15.00 and 17.00. Calls dominate the chain starting at 19.00 and extending to 40.00.
The US 10-year Bond Yield has tested the neckline of the Head & Shoulders and was found wanting. While there may be another attempt at trendline resistance, TNX may be due for a deeper correction. The mid-Cycle support currently at 41.74 may be a more likely target.
Comments
Log in or sign up to join the conversation.