SPX futures rose to a weekend high at 5899.20, in line with expectations set out last Friday. I had expected the SPX to complete its high on Friday, but there wasn’t enough participation prior to the Memorial Day holiday. Thus, the target was made during light trading over the weekend.  The 61.8% Fibonacci retracement level it 5891.25, also in line with expectations. The Cycles Model suggests the rally may not last the morning session. The implosion of the Japanese bond market, second only to the US bond market, may have staggering consequences for market liquidity.  

Today’s options chain shows Max Pain at 5830.00. Long gamma begins above 5850.00 while short gamma starts beneath 5800.00.

VIX futures consolidated above the mid-Cycle support at 19.79 over the weekend. The support given at that level should tell us that something may be afoot. Trending strength may make an appearance today giving the VIX a boost higher.

USD futures made a weekend low at 98.68 as it continues to find its Master Cycle low, due in mid-June. The Cycle Bottom , at 98.13, may not hold the final plunge to its Master Cycle low. The coming liquidity drain coming from the imploding Japanese bond market, may dramatically increase the demand for USD.

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