SPX futures are challenging the 50-day Moving Average at 3866.70. The Cycles Model suggests today may be a consolidation day. Trending strength may return on Friday. Next week appears to be relatively peaceful, barring any potential earth-shattering news.

This Morning’s op-ex shows Maximum pain for options investors at 3890.00. Long gamma starts at 3900.00, while sort gamma begins at 3875.00. SPX may stay trapped in the neutral zone for the day. Tomorrow’s op-ex shows Max Pain at 3955.00 with long and short gamma at lower levels as well.

ZeroHedge reports, “US stock futures reversed gains from earlier in the session and struggled to hold the momentum that propelled the S&P 500 to its best daily gain in three weeks, as investors assessed whether the world’s biggest economy can skirt worst-case recession scenarios. Contracts on the Nasdaq 100 and the S&P 500 were both 0.3% lower at 7:30 am ET, erasing earlier gains of 0.3%. Both indexes had bounced on Wednesday following better-than-expected earnings from FedEx and Nike as well as a pickup in consumer confidence, but the mood was dampened by memory chipmaker Micron, whose gloomy outlook knocked its shares in US premarket trading and weighed on other chip firms. European semiconductor shares also fell, erasing earlier gains on the Stoxx 600 gauge, though it remains set to break a two-week losing spell. The dollar index was flat while the US 10-year yield dropped to about 3.64%.”

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VIX futures consolidated in the lower part of yesterday’s trading range with a high of 20.40. The threat of a new low lingers until the end of the week. Today is day 262, nearly three weeks from the low on the chart. Trending strength is due to re-appear in the new year.

As we move into next week’s op-ex, Max Pain is at 22.00. Short gamma is at 18.00, while long gamma begins at 25.00. This week’s downward pressure on the VIX has expired.

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