SPX futures rose to the trendline at 6780.00 over the weekend, then gave it all back this morning.  It is currently consolidating near Friday’s close.  The reason for Friday’s wild swing may have been negative gamma, which becomes a factor beneath 6730.00 today.  Keep in mind that the 52-day Moving Average lies at 6694.00, beneath which sentiment turns very bearish.  The Cycles Model suggests a rise in volatility toward monthly options expiration on Friday.  Puts and calls are running neck-and-neck in what may be an explosive trading day.

Today’s options chain shows Max Pain at 6760.00.  Long gamma dominates above 6800.00 while short gamma becomes strong beneath 6730.00.

VIX futures are consolidating above the mid-Cycle support at 19.70 this morning.  VIX is on a confirmed buy signal.  The Cycles Model shows increasing volatility up to equities options expiration on Friday and lingering into next week.

The November 19 options chain shows Max Pain at 21.00.  Short gamma is very heavy between 15.00 and 20.00.  Long gamma begins at 22.00 and reveals institutional presence up to 100.00.

TNX is behaving correctively and may may revisit critical support in a Trading Cycle low near 40.70 in the next day or two.  Subsequently, trending strength may build as the month of November winds up.  Bond volatility may erupt in early December as the current Master Cyclewinds up by mid-month.

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