SPX futures rose to 6124.90 thus far this morning, a 64% retracement of yesterday’s plunge as favored momentum stocks suddenly reversed.  We may continue to see this type of stair-step activity down until the 50-day Moving Average at 6014.21 and trendline near 6000.00 are breached.  Today is a massive monthly options expiration and the dealers will be actively attempting to manage the SPX for the least payout to options investors.  This may lead to increased volatility during trading hours.  The Cycles Model suggests trending strength may appear on Tuesday.

Today’s options chain shows Max Pain at 6120.00.  Long gamma may begin at 6125.00 and strengthens at 6150.00.  Short gamma rules beneath 6100.00.

ZeroHedge reports, “US equity futures are flat, as European and Asian markets rise, as sentiment improves on the last day of the week. As of 8:10am ET, S&P futures were unchanged at 6,138 after Walmart’s forecast and concerns about consumer behavior led to a decline in stocks Thursday; Nasdaq futures gained 0.3% with the Mag 7 names are mostly higher led by META +0.6%. US-listed Chinese stocks rose in premarket trading on Alibaba’s post-earnings euphoria and after Treasury Secretary Scott Bessent said he would hold an introductory phone call with his Chinese counterpart, though he didn’t specify who on the Chinese side he’d speak to. Bond yields are 1-2bps lower and the USD is higher. Commodities are mixed: oil fell -0.8% this morning, while base metals are higher. From the macro perspective, overnight headlines were largely quiet; earnings results since market-close were mixed; BKNG announced 10% dividend increase and additional buybacks. Today, key macro focus will be global PMIs: the Mfg PMI is expected to print 51.4 vs. 51.2 prior; the Services PMI should print 53.0 vs. 52.9 prior.”

(Click on image to enlarge)

VIX futures continued to convalesce beneath overhead resistance at 16.44 to 16.56.  However, it may be coming out of its Trading Cycle (60 day) low this weekend, suggesting resistance may not hold in the following week.

The February 26 options chain shows Max Pain at 15.00.  There is no short gamma.  Long gamma may begin at 17.00 and is strengthening to 27.00.

TNX futures declined to 44.73 this morning, while the cash market bottomed at 44.82.  It may be performing an irregular retracement which allows it to resume its upward course.  The Cycles Model suggests trending strength may reappear early next week.

Bitcoin has risen above its 50-day Moving Average at 99078.00, offering a possible buy signal.  The Cycles Model suggests a probable three weeks left in the Master Cycle.  Should it remain above the 50-day at the close, Bitcoin may see a new all-time high.  The alternate view infers a possible new low, should the 50-day hold.  Bitcoin has already challenged the six month trendline near 97000.00.  A breakdown beneath it would favor the alternate view.

Zerohedge observes, “In the latest reversal of the cantankerous policies of former United States Securities and Exchange Commission Chair Gary Gensler – who officials in the crypto industry complained had sought to regulate the industry to death through enforcement actions – the SEC has agreed to dismiss the lawsuit against centralized exchange firm Coinbase, accusing the company of operating as an unregistered securities broker.”

More By This Author: