SPX futures made an overnight low at 6209.60 before a bounce back near the flat line. The July 3 high at 6284.65 remains intact as a late Master Cycle high. As I watch the Japanese and European markets, it is clear that the sources of this surge in stocks were not solely domestic. August is when most wars have begun. This extended Cycle surge may be an advance warning for smart money moving out of the danger zones as threats turn into action.  The Cycles Model calls for a downturn until late August, allowing a significant decline. The Model shows a significant burst of energy tomorrow as the FOMC releases its decision.

Today’s options chain shows Max Pain at 6230.00.  Long gamma may begin above 6250.00, while short gamma resides beneath 6210.00.  This market may have a short fuse.

ZeroHedge reports, “US equity futures rise as Trump leaves the door open for more discussions despite the 14 tariff letters sent yesterday and the extension of the deadline to Aug 1 which is “not 100% firm.” As of 8:15am ET, S&P futures rise 0.1% and Nasdaq futures gain 0.2% after US markets retreated on Monday from ATH on the back of increased tariffs on countries if deals are not reached (Japan/South Korea’s 25% were standouts). Pre-market, Mag7 names are all higher, while industrials are leading cyclicals with financials mixed. 10Y TSY yields are higher by 3bps to 4.41% as the curve bear steepens and the USD is higher after erasing an earlier loss. Commodities are generally weaker although Brent crude has once again rebounded from session lows to trade just shy of $70/bbl.  The macro data focus today is on Small Biz Optimism (prints in line with expectations), 1-year Inflation Expectations, and an update on Consumer Credit. ”

VIX futures rose to 118.96 in the overnight market, then declined to 16.95 this morning. This behavior may be indicative of attempts to control the VIX in advance of the FOMC as certain large institutions often make their play in the pre-market in an attempt ot set the tone for the market open.

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