SPX futures rose to 7551.20 this morning, but was repelled by the upper trendline. It is currently hoovering between yesterday’s closing price and the trendline. A reversal may be due today. The fractal appears to be a zig-zag move which implies a short but strong decline, minimally to the 52-day Moving Average at 6992.11.
Today’s options chain shows Max Pain at 7500.00. Long gmma resides above 7530.00 while short gamma dwells beneath 6475.00.
ZeroHedge reports, “US futures are trading at new all-time highs following Tuesday’s record-setting rally (when the S&P hit a new record high on negative breadth as is now the norm) , bolstered by a growing chorus of Wall Street bulls…”
The premarket VIX dropped to 16.78 this morning, but did not make a new low. While the VIX may go lower, the prevailing option is to challenge the neckline of the head & Shoulders formation at 35.30.
The June 2 options chain shows Max Pain at 18.00. There are few short contracts in the VIX. Long gamma may begin at 20.00 and is strong to 30.00. The appearance is calm.
The 10-year US Bond Yield has declined beneath neckline support and the Cycle Top, allowing bondholders to exhale in relief. However, it may not last.
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