Good Morning:

• Remember the video we put out above around the October bottom? My favorite part of the scene is the guy waving out the window at the other guy trying to get on the train that is leaving. That must be what it was like to be short yesterday. 
• I think I will take a victory lap on this video. But dont worry, i wont let it go to my head. This business always has some humble pie to serve up when you get cocky.
• I will be in the Trading Room for the morning session today. I am working on a one-week free trial to those who may want to give it a try.
• Futures are off marginally to 4077 after a quiet overnight session.
• The 4100 Call Wall is now near-term resistance, with 4124 slated to provide additional resistance above.
• Support today shows at 4055 (SPY405) to 4050, with 4000 as key bull/bear threshold support.
• Back in positive Gamma territory, we now look for volatility to begin contracting sharply, implying average daily S&P 500 Cash Index moves <=1%.
• Still, bulls are not quite on solid ground, as the options market still shows some anxiety around the PCE/ISM reports today and Non-Farm payrolls tomorrow.
• This can be seen in the SPX options term structure. Right now, the shortest-dated implied volatility is above the longer-dated.
• The implication is that traders are worried about a “hot” print in today and tomorrow’s data, which could quickly unwind yesterday’s gains.
• And some event volatility premium remains around the 12/14 Fed Meeting and rate announcement.
• For now, there is room for the market to grind a little higher, where it will encounter the bear market down trendline while it fights to hold and conquer the 200-day line around 4075.
• Also, note from the chart below that the price is approaching the center of the 20-week cycle. The cycle would have peaked in the first 1/3 of the semi-circle in a more bearish environment. Like the previous 20-week cycle that brought us the October 13th low, this cycle shows early, bullish intentions.