SPX futures have edged modestly higher in a retracement , possibly to 6935.00-6940.00. The reversal from the all-time high at 6965.69 may be in its early stages where efforts are being made to claw back losses. It is ascertainable that each successive surge higher has been shorter, as it was met with growing resistance. The formation being considered is called a rising wedge or Ending Diagonal. See yesterday’s end-of-day commentary. The bottom trendline of the Ending Diagonal lies near 6875.00, offering an aggressive sell signal. Intermediate support is at 6830.00 while the 52-day Moving Average lies at 6817.00, confirming the sell signal.

Today’s options chain shows Max Pain at 6920.00. Long gamma may begin above 6950.00 while short gamma rules beneath 6900.00.

ZeroHedge reports, “Stock futures are muted, with traders awaiting two major catalysts: A possible Supreme Court ruling on whether Trump’s tariffs are legal and December payrolls — a key datapoint for the trajectory of interest rates.”

VIX pre-market is consolidating near yesterday’s high and above the trendline at 15.40. It may be due for a surge as trending strength comes into play this weekend. A panic Cycle may develop over the next week as investors become alarmed and rush to hedge their portfolios.  What may cause the alarm?  Earnings may disappoint. Global tensions may increase. A couple of significant banks will have to reveal their losses in the silver trade. CREs and consumer loans may be problematic. Potentially rising interest rates may dim future prospects. And Wall Street remains bullish.

The January 14 options chain turns bullish above 16.00. Significant put holdings at 15.00-16.00 indicate growing dealer positioning, since they must take the opposite side of the trade.  The pot is starting to boil.
 

Speaking of the pot starting to boil…TNX has punctured the neckline of the Head & Shoulders formation at 42.05. US 10-Year Bond futures reached a high of 42.15 thus far this morning. While the Cycles Model only anticipates another week of rally, the Head & Shoulders target may be in view, despite Trump’s attempt at another QE.

ZeroHedge reports, “Shares of LoanDepot, Rocket Companies, and Opendoor Technologies surged in premarket trading after President Trump signaled plans to push Freddie Mac and Fannie Mae to purchase $200 billion in mortgage-backed securities, a move aimed at driving down mortgage rates and improving affordability ahead of the midterm election cycle.”

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