Stocks finished the day lower, with the down about 40 bps, but the decline was probably worse than the index suggests, since the ETF fell nearly 1% while Meta rose more than 6.5%, offsetting some of the weakness.
The technicals reveal just about everything we need to know. The 7,630 level has been strong support, largely because a high level of option gamma sits there. Once that option gamma is gone, the index could start to slip more quickly toward 7,600. But after that, there is nothing underneath until 7,500, which could come quickly if we were to gap lower at the open today.
So the index has put itself in a vulnerable position, and the downside could become a slippery slope. With a number of macro headwinds currently in place, any one of them could be the trigger event at this point.
Rates are one of those headwinds, with the moving above 4.8% and closing at its highest level since November 2023, at nearly 4.85%. A move up to 5% doesn’t seem so unrealistic at this point.
Meanwhile, strengthened a bit more on Wednesday, but it still has some breathing room, with support firmly around 152.25. A break of that support would likely push USD/JPY lower, perhaps into the upper 140s, which could start to weigh on risk assets globally.
easily broke through resistance on Wednesday at $94 and is now above its upper Bollinger Band, with the RSI scraping up against 70. It may be positioning itself to consolidate for a few days, but I think WTI ultimately heads higher, with the potential to reach $101.
Today is the , and markets will be watching those components closely. Those components will likely determine whether the report is viewed as hot.
