The Long View

It’s times like these, when the markets are near all-time highs, that Wall Street loves to trot out the idea that “You Can’t Time the Market.”  In addition, we have seen that bull markets may run for seriously long periods of time while bear markets are rather short in comparison.  But you won’t see articles or books touting “Buy for the long haul.”  at market bottoms.  Sentiment “goes with the flow.”  That is why it takes so much time and study to master the market.  This chart is not attempting to predict anything.  However, if you believe Mark Twain, “History doesn’t repeat, but it rhymes.”  Then you may understand that everything runs in Cycles.

 

Posted in Published | 13 Comments

February 7, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

11:33 am

SPX has made its reversal by declining beneath 6050.00, in agreement with the Cycles Model.  While a confirmed sell signal may be made beneath the 50-day Moving Average at 5998.00,  an aggressive sell may be assumed.  It is time to reduce long exposure.

 

7:45 am

 

Good Morning!

SPX futures remain flat this morning, awaiting the January BLS Employment Situation Survey.  Continuing claims appear little changed, while the anticipated benchmark revisions may have some big surprises.  The Cycles Model may allow a new all-time high today, with a reversal to follow.  The January 24 high was a bit early for the Master Cycle.  Should it elect to make a new high today, it would be on day 260.  Retail investors are steamrolling bearish hedge funds and institutions, buying every dip that the market presents in volume not seen before.  Of course, the sell signal lies beneath the 50-day Moving Average at 5997.54.  There may be a big surprise in either/;both directions.

Today’s options chain shows Max Pain at 6050.00.  Long gamma may begin at 6075.00 while short gamma resides beneath 6000.00.

Zerohedge reports, “US equity futures are unchanged, with tech lagging and small caps leading as traders hunker down ahead of a payrolls report that is expected to show 175,000 new workers but will also be dramatically revised. As of 8:00am ET, S&P futures are flat with the index on track for a 0.7% weekly advance; Nasdaq futures are down 0.1%, with Mag 7 mostly lower after AMZN’s earnings disappointment last night (AMZN -2.6%; TSLA -1.5%; NVDA -0.9%); the e-commerce and cloud-computing company gave an outlook that was weaker than expected. Meanwhile, there seems to be no stopping Meta as the social networking giant is on track to extend gains for a record 15th consecutive session. Bond yields are largely flat; USD unchanged. Commodities are mostly higher led by oil (+0.8%). Today, the key macro focus will be NFP (a full scenario analysis from JPM and Goldman can be found here): the Street’s estimate is 175k; a step down from last month’s 256k print. For the unemployment rate the Street expects 4.1%. ”

 

VIX futures are consolidating near the low.  It may have reached its “floor” that may prove to be support for today’s launch.  A jolt of trending strength ma appear today as investors may begin hedging again.

The February 12 options chain shows Max Pain at 17.00.  While there are few puts, calls are showing investor interest up to 30.00.

 

USD futures are consolidating above the 50-day Moving Average at 107.61, creating a possible buy signal.  While today may appear calm, the Cycle Model suggests a triple dose of new trending strength next week.  This buy signal is worth taking seriously.

Investing.com reports, “TOKYO/LONDON (Reuters) -The U.S. dollar edged higher on Friday ahead of key U.S. payroll figures later in the day, after the yen climbed to a nine-week high as market players piled on bets for more interest rate hikes in Japan.”

 

The Japanese Yen has leaped above the 50-day Moving Average at 64.64 and is now above mid-Cycle support at 65.62.  The Cycles Model suggests a rally in the Yen to mid-March.  Note the Yen and the USD are both rising.  This may put an end to the Yen carry trade.

 

8:37 am

TNX extended its Master Cycle low this morning, on day 267.  It has subsequently reversed, challenging the 50-day Moving Average at 44.80  after the release of the January payrolls report.   The Cycles Model suggests TNX may rally through the end of March.  Note the potential Head & Shoulders formation.

 

 

 

 

 

 

 

 

Posted in Published | Comments Off on February 7, 2025

February 6, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

10:20 am

The Agriculture Index has put in an inversion high yesterday.  The path of least resistance is a decline to the 50-day Moving Average at 383.40, or possibly to the trendline near 375.00.  The Cycles Model suggests the next two weeks may be an accumulation phase for Ag commodities.  The breakout above the descending trading channel verifies a potential change in trend.  We will be reading and hearing more about food shortages in the coming year.

ZeroHedge remarks, “Pennsylvania State Police are investigating an egg heist in Greencastle, about 65 miles southwest of Harrisburg, over the weekend. The very thought of such a crime may seem unimaginable, but with wholesale egg prices reaching record highs, the thieves appear to have been paying close attention to recent developments surrounding the worsening nationwide egg shortage.

Local media outlet WHP-TV reported approximately 100,000 organic eggs (worth > $40,000) were stolen from the back of Pete & Gerry’s Organics’ distribution trailer on Saturday night in Greencastle.”

 

8:15 am

 

Good Morning!

SPX futures rose to 6079.80, an 80% retracement of the decline from 6120.91 on January 31.  The Cycles Model suggests the SPX may be at an imminent reversal point today.  Should that be so, SPX may decline beneath its 50-day Moving Average at 5994.34, issuing a sell signal.  Retail buyers have been the driving force in keeping the SPX above the 50-day for the past two weeks.  Retail participation has been greater than at the Dot-Com bubble in 2000.  Yet the all-time high remains at January 24.

Today’s options chain shows Max Pain at 6050.00.  Long gamma may begin above 6080.  Short gamma dominates beneath 6035.00.

ZeroHedge reports, “US equity futures are slightly higher despite heavyweights such as including Ford and Qualcomm slumping in premarket trading after disappointing earnings while tech underperformed on mixed Mag7/Semis pre-mkt price action.  As of 8:15am, S&P 500 futures were little changed after erasing an early gain fueled by Treasury Secretary Scott Bessent’s comment that the Trump administration is focusing on bringing down the Treasury 10-year yield. Contracts on the Nasdaq 100 were unchanged. Bond yields and the USD finally reverse recent losses and rise this morning while commodities are stronger across all of Ags, Energy, and Metals ex-Precious. Scott Bessent said that the Administration is focused on lowering the 10Y yield rather than the Fed Funds rates; the best way to decrease yields is through a lower budget deficit. In other news, HON is splitting into 3 companies. Today’s macro focus is on Jobless data and the BOE decision. The Fed speaker slate include’s Waller (2:30pm) and Logan (5:10pm), and we get earnings from Amazon after the close.”

 

 

 

VIX futures rose to 16.15 overnight, then settled back to the flat line.  The Cycles Model anticipates a burst of trending strength by this weekend.

The February 12 options chain shows Max Pain at 17.00.  However, neither short-nor long gamma show a positive sentiment.

 

TNX has begun to rise out of its Master Cycle low and trendline at 44.00.  What is unrecognized by many is the Head & Shoulders formation at the highs.  Today’s auction shows $185 billion in 4-and 8-week  T-bills will be auctioned.  Bessent is not revealing whether he may curtail the issue of short-term debt VS long-term debt.

Investing.com observes, “President Trump’s comments and executive orders have roiled markets and investor expectations, but from the vantage of the Treasury market, a relative calm prevails. This could change, of course, but for now, key yields for government bonds have been flat to slightly lower in recent days.

The serene profile for Treasury yields is surprising, given the firehose of news updates on topics that, in theory, are relevant to market expectations, inflation, and economic growth. It’s only Wednesday, but Trump so far this week has launched a trade war only to dial it down, offering what may be a temporary reprieve to plans to impose 25% tariffs on Canada and Mexico (a new 10% tariff on China imports still applies).”

 

Bitcoin remains beneath the 50-day Moving Average at 98750.00, on a sell signal.  The next support is the 100-day Moving Average at 94780.44, followed by the 5-month trendline near 90000.00.  Most Bitcoin investors are sanguine about the volatility and may be unprepared for a sudden lurch downward that the Cycles Model anticipates over the weekend.

 

Gold futures declined to 2870.55 this morning, off its master Cycle high made yesterday at 2906.00.  Cycle Top support is at 2866.95, where an aggressive sell signal may be made.  The zig-zag formation identifies this as an Ending Diagonal.  Once the reversal is made, the Ending Diagonal may completely retrace to the low made in October 2022.

ZeroHedge remarks, “On January 30th this was written regarding The Musical Chairs of Gold Supply

Bullion banks relied on a game of musical chairs, borrowing gold to meet short-term needs. But when enough chairs are removed—when buyers refuse to lease their holdings—banks are forced to compete for an ever-dwindling supply. That’s what’s happening now. From: Zerohedge Edit-The LBMA Doesn’t Have the Gold

Yesterday, Bloomberg, in an article entitled Gold at Bank of England Trades at Discount as Tariff Fears Drive U.S. Demand describes the current gold market situation. The article states that:

‘Gold stored in the Bank of England (BOE) vaults is trading at a discount to the broader market as concerns over potential Trump tariffs drive a rush for physical bullion. The surge in demand has created weeks-long withdrawal delays, making BOE gold less attractive than metal stored in commercial vaults.’”

 

Crude oil futures declined to 70.69 this morning as it tumbles beneath the 50-day  Moving Average, reiterating its sell signal.  The Cycles Model suggests about two more weeks of potential decline.  Should it bypass the neckline of the Head & Shoulders formation at 69.00, then the potential target for this decline may be the Cycle Bottom at 64.96.

ZeroHedge remarks, “Oil prices are leaking lower this morning after surging yesterday on Trump’s “maximum pressure” plan for Iran as traders weigh the effect of a US-China trade war on demand.

“Trump tariff chaos and trade war is no good for global growth and oil demand growth,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. “But supply disruptions, as so often before, can then rapidly and suddenly turn everything around.””

 

 

 

 

 

Posted in Published | Comments Off on February 6, 2025

February 5, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

8:15 am

 

Good Morning!

SPX futures declined to 5995.40, remaining above the 50-day Moving Average at 5988.00.  Today may be the final day of reckoning in the Cycles structure.  It is day 258 of the Master Cycle, but the top may have already been made on January 24, leaving equities to flounder in wide-ranging but sideways formation above the 50-day Moving Average.  Today is a Cyclical Pivot day, inferring that equities may now follow the course laid out by the Cycles Model.  That is, a decline to the end of March.  The Pivot (down) may begin at any time this morning.

Today’s options chain shows Max Pain at 6040.00.  Long gamma may begin above 6055.00 while short gamma lie beneath 6000.00.

ZeroHedge reports, “US equity futures slumped, dragged by tech following disappointing earnings from two tech giants (AMD, GOOG) and concerns that an escalation of the Trade War 2.0 will lead to negative revenue impacts for MegaCap Tech (AAPL, Mag7). Further, USPS suspends mail deliveries from China/HK as small parcels that were previously exempt from tariffs are coming under the new Executive Order; impacts about 4mm parcels per day (AMZN; Shein; Temu). As of 8:00am ET, S&P futures were down 0.4%, suggesting Wall Street’s rebound may be short-lived, while Nasdaq 100 futures dropped 0.8% as Google parent Alphabet and AMD plunged in US pre-market trading after disappointing results, and dragged the entire Mag7 lower (GOOGL -7%, AMZN -1%, AAPL -2%, MSFT -0.3%, META -0.4%, NVDA +0.4% and TSLA -1%).  Bond yields slide again, dropping 6bps to 4.46%, and down some 14bps from Tuesday’s highs as rates react to the negative growth impact rather than the expected inflationary impact. The USD is weaker again and commodities mixed as goal soars to a new record high approaching $2900 while energy is sold, and Ags particularly Softs move higher. Today’s macro data focus is on ADP, Mtge Apps, and ISM-Srvcs though the Trade Balance details may pique the Market’s interest. US companies reporting results on Wednesday include Uber, Disney, Ford and Qualcomm.”

 

 

VIX futures rose to 17.75 and is consolidating inside Tuesday’s trading range.  The Cycles Model suggests today may be a day of trending strength, suggesting a possible breakout.  This may be followed by yet another trending strength day on Friday.   The August 5 high at 65.73 makes an interesting target…

Today is options expiration for the VIX.  The longs have gained some momentum, although there is no serious interest in the VIX above 30.00.  Today’s expiration may release some of the hold that the shorts may have on the VIX.

 

TNX extended its decline toward the trendline at 44.00 on day 265 of the Master Cycle.  This move forms an irregular correction, beginning under the trendline and ending above the trendline.  In addition, there is a probable Head & Shoulders formation above the January 13 high telling us that yields have much further to go.

 

Bitcoin slipped beneath its 50-day Moving Average at 98823.51, putting it on a sell signal.  Momentum may be building for a violent, but short-lived decline over the next two weeks.

 

USD futures are challenging the 50-day Moving Average at 107.60.  This may mark the end of the correction as the trend continues higher.

 

Gold futures rallied to a new high at 2901.41 this morning.  This may be the end of the line, as the Master Cycle is on day 261 and round number resistance may take hold.  Stay alert as gold tumbles beneath the Cycle Top support at 2875.00 for an aggressive sell signal.

 

The Agriculture Index has burst above the declining trendline as food inflation takes center stage.  The Cycles Model shows an inversion as it breaks out above the Cycle Top resistance at 404.25.  A decline beneath that level signals a potential correction back toward the trendline near 380.00. The Cycles Model suggests the correction may last perhaps three weeks.  This may allow accumulation of agricultural commodities during that time.

ZeroHedge remarks, “The latest wholesale data from Urner Barry shows egg prices continuing to soar to new record highs amid an ongoing and devastating avian influenza outbreak straining the nation’s egg-producing hen capacity. For ZeroHedge readers, it might be time to consider buying—or even building—a backyard chicken coop ahead of spring, as the nationwide egg shortage is poised to worsen.

Monday’s print of the Urner Barry Egg Index EBP shows prices jumped to $6.44 per dozen, a new record high and more than $1 above from two weeks ago when we informed readers about the “blue-sky breakout” in wholesale prices. ”

 

 

 

 

 

Posted in Published | Comments Off on February 5, 2025

February 4, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

 

7:45 am

 

Good Morning!

NDX futures are consolidating in a range, testing the 50-day Moving Average at 21275.00 at the low and the Intermediate resistance at 21400.26 at the high.  Should it break out above Intermediate resistance, it may challenge the January 31 high at 21846.00.  Tomorrow brings a Cycle Pivot day and a possible high volatility/strength day, which supports that outlook.  The current outlook does not support a new all-time high.

ZeroHedge remarks, “More U.S. CEOs exited their companies in 2024 than in any year in more than two decades, with economic and technological factors contributing to the trend, according to a recent report from global outplacement company Challenger, Gray & Christmas, Inc.”

 

SPX futures are hovering just above the 50-day Moving Average at 5988.00.  The Cycles Model supports the probability that SPX may make a nominal new all-time high.  However, the current Master Cycle may be running out of time.  Wednesday may be a high volatility/reversal day.

Today’s options chain shows Max Pain at a highly-contested 6000.00.  Long gamma may begin above 6030.00 while short gamma dominates beneath 5955.00.

ZeroHedge rpeorts, “US equity futures are flat, recovering from earlier losses after China’s restrained response to US tariffs, and a last-minute reprieve for Canada and Mexico. As of 8:00am ET, S&P futures are flat, having dropped 0.5% earlier after China tariffs went into effect at midnight and China retaliated; Nasdaq futures rose 0.2% thanks to a bid for parts of the Mag7/semis complex (GOOGL +0.7%, AMZN +0.5%, AAPL -0.5%, MSFT flat, META +0.6%, NVDA +0.4% and TSLA +0.5%). Unlike yesterday, USD is weaker to start the session, dropping 0.2% as some traders flagged relief that the worst-case scenarios seem to be avoided. The bond market reaction is muted, with the yield curve bear steepening 1-2bps; the 10Y yield rose 2bps to 4.58%. Commodities are lower with energy getting hit and WTI crude oil futures falling more than 2% to YTD low. Today’s macro focus is on JOLTS and Factory Orders”

 

VIX futures are consolidating inside yesterday’s trading range.  VIX is due for a burst of strength beginning on Wednesday with a possible increase later this week.  Note the subtle but persistent uptick in the lows.  The Current Master Cycle may not be complete until the end of March.

Tomorrow’s options chain shows Max Pain at 17.00.  Short gamma is well populated at 15.00-17.00.  Long gamma begins at 18.00 and shows rising sentiment to 25.00.

 

TNX rose to 45.94 this morning, challenging/crossing Intermediate resistance at 45.87 and leaving the Master Cycle low at 44.62 behind.  The Cycles Model shows steady progress this week, with another burst of volatility over the weekend.  Today an $85 billion 42-day T-bill auction will be held.  Upcoming auctions are to be announced.

 

Bitcoin is hovering above its 50-day Moving Average at 99011.00 this morning.  Should the bounce be over, Bitcoin may resume its decline beneath the 50-day.  The Cycles Model offers two more weeks of possible decline before a substantial retracement may be seen.  A decline beneath the trendline near 91000.00 may open the door for a panic situation.

 

USD futures are pulling back, possibly testing Intermediate support at 108.26 this morning.  USD may continue to consolidate beneath its Cycle Top over the next few days.  However, Trending strength may return next week to push USD to new highs.

 

 

 

 

 

Posted in Published | Comments Off on February 4, 2025

February 3, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

10:45 am

SPX has bounced above the 50-day Moving Average at 5987.00.  Should it retain its perch above the 50-day , there is a possibility to continue rallying to a new ATH near 6200.00.  Alternatively, a decline back down to the trendline at 5900.00 may limit the rally to near- 6000.00.  Fortunately, the issue may be resolved in just a matter of days.

 

10:13 am

BKX has fallen beneath the trendline at 136.00, crating a sell signal.  The 50-day Moving Average lies at 133.15, signaling further price erosion   There seems to be no direct connection between Trump’s tariffs and the BKX.  However, we cannot ignore that there is something weakening the banking index.

 

8:00 am

Good Morning!

NDX futures fell to 20839.80 this morning, beneath the 50-day Moving Average at 21267.68.  There is a bounce that may alleviate the fear of loss as the markets attempt to regain the 50-day.  However, a further plunge to the 100-day Moving Average at 20697.67 may elicit a panic-selling response.  The 15-month trendline is at mid-Cycle support at 20012.92.  We may continue to see wide-ranging choppiness until Wednesday, the next Cyclical Pivot day.  It is hoped that Trump’s trade war will be short-lived.

Today’s options chain shows max Pain at 21400.00.  Long gamma may begin above 21450.00 while short gamma lies beneath 21290.00.

 

SPX futures tumbled to 5908.40 before a bounce.  It remains beneath the 50-day Moving Average at 5987.02, a cause for concern as it offers a well-recognized sell signal for traders.  Should the decline resume, the 100-day Moving Average and 15-month trendline lie at 5881.06, offering a break in the trend.

Today’s options chain shows Max Pain at 6065.00.  Long gamma may begin above   6075.00 while short gamma lies beneath 6050.00.  Dealers must see SPX rise 100 points above its present position to regain neutral ground.

ZeroHedge reports, “US equity futures tumbled as the market prepares for Trade War 2.0, with both tech and small-caps underperforming as the dollar soared more than 1% pre-mkt, trading near a two year high and the yield curve bear flattens after Trump announced tariffs on Canada, Mexico and China, and warned that European levies are coming. The Canadian dollar fell to its lowest since 2003 and the euro weakened. As of 8:00am ET, S&P futures are down 1.7%, but off session lows having tumbled as much as 2% earlier; Nasdaq futures slide 1.7% with the Mag7 all broadly lower (GOOGL -1.8%, AMZN -2%, AAPL -1.9%, MSFT -1%, META -2%, NVDA -3% and TSLA -3%). Pre-mkt, Mag7/Semis are providing no safety and Cyclicals ex-Energy are under pressure as the market analyzes whether “Trade War 2.0 ushers the end of US Exceptionalism” according to JPM. The 2Y yield is +7bps pre-mkt as the bond market forecasts an inflationary impulse from the tariffs, indicating the market is not selling off on growth but rather on inflationary fears. Trump is said to have calls scheduled with Canadian and Mexican leaders today but warns that tariffs will be implemented on Tuesday if no deal is achieved; sets EU as the next target. Today’s macro data focus will be on ISM-Mfg, Vehicle Sales, and Construction Spending.”

 

VIX futures ramped up to 20.41 in early trading.  It remains beneath last Monday’s peak, but not by a lot.   The Cycles Model shows VIX receiving a triple boost of trending strength this week, sending it to possible new highs.

The October 5 options chain shows a solitary short gamma holding at 15.00.  Long gamma edges out the shorts at 16.00 and runs strong to 30.00.

 

TNX has no appearance of being affected by the Trump tariffs.  It is hovering just above the January 30 low at 44.88.  The Cycles Model shows no particular activity this week, although it may change by the weekend.

 

Bitcoin slipped beneath its double support at 99807.98 on Friday.  This morning it continued its decline, slashing through the 100-day at 63895 and bouncing off the 5-month trendline at 90000.00.  It has since bounced above the 100-day, but remains distant from the super-support at 99813.98.  Should it fail to gain traction, we may see Bitcoin challenge the trendline by the end of the week.

 

USD futures ramped above the Cycle Top at 109.42.  It may find support there, as today is a day of trending strength.   The Cycles Model suggests that USD may continue to rise until mid-March.  Tariffs may be self-defeating, as the currency of the exporting country may lose value, negating the price hike imposed by tariffs.

 

 

 

 

 

 

Posted in Published | Comments Off on February 3, 2025

January 31, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

3:36 pm

SPX elected the 5-day fractal, confirming the January 24 Master Cycle high at 6128.18.  The decline may extend to the end of March, with the first likely panic day on Monday.  A possible target may be the 15-month Ending Diagonal trendline at 5925.00.  Take note: short selling in January was 10 times long buying.

 

7:45 am

Good Morning!

NDX futures rose to 21697.60 thus far this morning, above Intermediate support at 21410.75.  NDX may have completed a 5-day fractal this morning from the January 24 Master Cycle high.  A reversal beneath this support may signal the decline may be underway.  The alternate view is that equities may be forming an 8-day fractal with completion near the Cycle Top at 22075.53.

 

SPX futures rose to a morning high at 6102.60, completing a 5-day fractal from the January 24 high.  There’s a good chance that the retracement bounce may be complete.  SPX may be in the reversal zone this morning, with a better-than-even probability of a reversal today.  The alternate possibility may be that SPX goes higher, possibly to the Cycle Top at 6201.89 and a new all-time high.

Today’s options chain shows Max Pain at 6065.00.  Long gamma may begin above 6075.00, but becomes significant above 6100.00.  Short gama may begin beneath 6050.00.

ZeroHedge reports, “US equity futures are higher this morning on the last day of a volatile week, amid healthy earnings results post market close yesterday. As of 8:00am, S&P futures are up 0.5%, while Nasdaq futures gain 0.8% with AAPL up +3.5% after first sliding after disappointing iPhone sales only to reverse losses on the company’s (rather modest) guidance; Intel gained +1.4% as results were better-than-feared while Mag7 stocks were mostly higher (GOOGL +0.5%, AMZN +0.9%, AAPL +4%, MSFT +1%, META +0.5%, NVDA -1% and TSLA +0.2%). Europe’s Stoxx 600 index headed for its best month in two years as strong earnings reports burnished the appeal of the region’s stocks over pricier Wall Street equities. As we get closer to the Feb 1 deadline, headlines on Trump’s tariffs took the central stage. Trump’s reiteration of the 25% tariffs on Canada/Mexico led to some volatility yesterday, but the markets quickly rebounded and still managed to finish in the green. 10Y treasury yields were flat at 4.52% while the dollar gained ahead of President Donald Trump’s weekend tariff announcement. Today, key macro focus will be December PCE and Energy earnings (XOM and CVX).”

 

 

VIX futures reached a morning low at 15.22.  The move may be complete, or nearly so.  The Cycles Model shows volatility erupting early next week  with a potential for multiple panic days.

The February 5 options chain shows Max Pain at 17.00.  There is very little short gamma from 15.00 to 17.00.  Long gamma may begin at 18.00 and above.

 

 

TNX has reversed from yesterday’s Master Cycle low at 44.88.  The 50-day Moving Average may have been the focal point for the reversal, rather than the trendline near 44.00.  Contrary to popular opinion, the Cycles Model shows interest rates rising through the end of March.

ZeroHedge observes, “With constant fearmongery about Trump’s tariffs prompting a panic-flation, it is interesting to note that inflation data has been serially disappointing in recent weeks (printing below expectations)…

Source: Bloomberg

And this morning we get The Fed’s (old) favorite inflation indicator (until they changed their minds because it didn’t fit the narrative) – Core PCE – print at +2.8% YoY (flat from the prior month).”

 

 

USD futures rose to a morning high at 108.37 this morning.  The 50-day Moving Average at 107.50 and Intermediate resistance at 108.08 have been surpassed, creating a buy signal.  The Cycles Model suggests the USD may continue to rally through mid-March.

 

 

 

 

 

 

Posted in Published | Comments Off on January 31, 2025

January 30, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

7:30 am

Good Morning!

NDX futures made an overnight high of 21588.20, challenging the Intermediate support at 21408.77, where a sell signal may be made.  NDX still maintains the long-term trend, but is being subject to increasing volatility and inability to make new highs.  NVDA closed beneath the 200-day Moving Average, hardly a performance worthy of the Mag-7.

 

SPX futures rose to 6071.70 in the overnight session, then declined to “Max Pain” at 6050.00 at present.  There may be an attempt to close the month of January above the December 31 close at 5881.00.  Keep in mind the 50-day Moving Average is at 5984.28.  Beneath it lies a confirmed sell signal.

Today’s options chain shows Max Pain at 6050.00.  Long gamma lies above 6070.00 while short gamma lurks beneath 6000.00.

ZeroHedge reports, “US equity futures and European markets are broadly higher led by Tech/Small-Caps following a dovish Powell press conference (which reversed the hawkish FOMC statement) and solid, if hardly stellar (see MSFT), earnings. As of 8:00am ET, S&P futures are up 0.25%, off session highs; Nasdaq futures rise 0.3% with Mag 7 names mixed (GOOGL +0.7%, AMZN flat, AAPL -0.4%, MSFT -4%, META +1%, NVDA -0.8% and TSLA +2%). European markets are solid in the green ahead of what is widely expected to be the 5th consecutive ECB rate cut later Thursday to revive the sluggish eurozone economy. Bond yields are lower as the curve flattens and USD weakens on the back of continued strength in the JPY which will continue until Japan’s exports crater. Commodities are mixed with strength in both base and precious metals while oil has reversed earlier losses. Today’s macro data focus is on jobless claims and Q4 GDP data ahead of tomorrow’s Dec PCE print, after the close we get AAPL earnings.”

 

VIX futures are consolidating above the 50-day Moving Average at 16.08.    The retracement appears complete, or nearly so.  The Cycles Model shows increasing trending strength wit a spike over the weekend.

 

Bitcoin may have made its retracement high at 105613.70 on a day of trending strength today.  If so, the retracement may be over and a decline may be imminent.  The Cycles Model calls for three more weeks of decline.  A sell signal may be made should BTC decline beneath the 50-day Moving Average at 99249.57.

 

TNX extended its master Cycle low to 44.88 this morning, just above the 50-day Moving Average at 44.72.  Today is day 259, so the reversal appears timely.  The Cycles Model suggests a resumed rally to the end of March.

 

 

 

 

 

 

 

 

Posted in Published | Comments Off on January 30, 2025

January 29, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

3:31 pm

The Powers that be rescued SPX from short gamma beneath 6025.00 and may attempt to keep it near Max pain at 6050.00, where the options payout is the least.  From there we await the earnings deluge after the close.

ZeroHedge points out, “The S&P 500 is down 32bp as AI continues to dominate headlines ahead of Microsoft ($3.3TN), Meta ($1.7TN) and Tesla ($1.3TN) results on Wednesday evening. AI Power is retracing, up 1.4%, whilst AI Software Pioneers are 2.1%, reversing some of the basket’s outperformance from the last two days. AI Semis are lower by 80bp and subdued with Nvidia down 5%. Bullish arguments around the secular theme focus on competition fuelling technological advances which will only increase the proliferation/adoption of AI in the long run. Meanwhile, some are questioning the veracity of DeepSeek’s claim around training costs.”

 

8:00 am

Good Morning!

NDX futures are hovering above the 50-day Moving Average at 21245.00 this morning, as the FOMC announcement at 2:00 pm is made ready.  The FOMC exerts tight control over the market movements on announcement day.  The expectation is that there may be no immediate cuts as of announcement day, but a possible .25% cuts may come later with good data.  The January meeting  may not offer any surprises or new information.  Watch for a possible decline beneath the 50-day which may announce the resumption of the decline.  The Cycles Model provide little detail of upcoming events until this weekend, where volatility spikes may occur.

ZeroHedge observes, “ASML shares surged as much as 12% in European trading, the biggest intraday gain since 2020, after the chip equipment maker posted quarterly bookings that topped Bloomberg Consensus estimates. Despite concerns over weaker demand from key clients Intel and Samsung, JPMorgan analysts believe that strong orders came from Taiwan Semiconductor Manufacturing Co. and other high-end chip producers.”

 

SPX futures may have slowly begun to fade yesterday’s close.  As mentioned, we await the crossing of the 50-day Moving Average at 5982.64 to offer a potential sell signal.  The 15-month trendline awaits at 5863.86, where the uptrend is finally broken.

In today’s options chain, Max Pain may appear at 6050.00.  Long gamma begins to strengthen at 6070.00 and becomes very strong above 6100.00.  Short gamma emerges at 6025.00 and below.

ZeroHedge reports, “Futures are flat with Tech/Small-caps big higher as the market looks to recover from Monday’s tech plunge. As of 8:00am S&P futures are unchanged, erasing a modest earlier gain during the European session; Nasdaq futures extend their Tuesday rebound and rise 0.4% after rising 2.0% on Tuesday; Mag7 names are mixed (GOOGL +0.5%, AMZN +0.9%, AAPL -1%, MSFT flat, META +0.5%, NVDA -0.7% and TSLA -0.2%) with semis rallying but this may not mean the end of the Semis-to-Software rotation which is +10% this week. Europe’s Stoxx 600 index rose 0.6% after chip giant ASML soared 11% after order bookings beat estimates, spurring gains for semiconductor stocks. Bond yields are flat to down 2bps to 4.52% ahead of what is expected to be a dovish pause by the Fed today (full preview here). USD strength continues, given the likelihood of new tariffs announced this week or weekend. Commodities are mixed as Ags and Metals are bid. Looking to the day ahead, the main highlight will be the Federal Reserve’s policy decision, along with Chair Powell’s subsequent press conference, while the Bank of Canada will also be making their own policy decision. Data releases include December advance goods trade balance and wholesale inventories (at 8:30am ET). Finally, today’s earnings releases include tech giants Tesla, Microsoft and Meta.”

 

 

VIX futures rose to 16.89 this morning, above the 50-day Moving Average at 16.03.  This is an actionable buy signal.  The Cycles Model suggests a continuation of thee rally through the end of March.  Hang on for volatility!  Today is VIX weekly ooptions expiration day.

The February 5 options chain shows Max Pain at 17.00, with a small short gamma at 15.00.  Long gamma may begin at 18.00 and shows positive sentiment to 30.00.

 

TNX  extended its Master Cycle low to this morning at 45.12 (45.10 in the futures).  Today is day 258, the “ideal” reversal date.  This afternoon’s FOMC announcement may be accompanied by a “sudden” reversal in TNX, as it did in September.

ZeroHedge comments, “Personal consumption represents over two-thirds of economic activity.

Therefore, consumers’ ability to spend, i.e., income, is vital to the economy.

Taking it one more step, RealInvestmentAdvice.com’s team notes that confidence in the security of our jobs and wages drives the marginal consumption behaviors of most citizens.

With that, we share a chart that should worry the Fed.

The chart below shows that the University of Michigan survey of real household income expectations is plummeting.

Moreover, the index is at its lowest since record began…”

 

 

 

 

Posted in Published | Comments Off on January 29, 2025

January 28, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

2:19 pm

SPX may have completed its initial downside fractal.  The reason for the bounce is because the energy of the decline must be dissipated before the next decline.  Once beneath the 50-day Moving Average, another panic event may occur.  The next target for the decline is likely to be the Cycle Bottom shown in the chart at 5812.43.

 

8:15 am

Good Morning!

NDX futures challenged the 50-day Moving Average at 21238.36in the overnight session, but could not climb above yesterday’s intraday high.  It has since fallen back beneath the 50-day.  Goldman’s trading desk relates that, “No one was buying.” on the way down yesterday.  The NDX made a 70% retracement of a 2-week rally in a day.  The view on AI may have been fundamentally changed, as players walk off the field , protesting, “It was only a flesh wound.”

The NDX options chain remains deep in short gamma, while the longs were hung out to dry.

ZeroHedge comments, “The entire AI complex sold off violently on Monday after China’s “AI Sputnik” moment, driven by the low-cost DeepSeek chatbot, raised doubts about the market’s future expectations for massive investments in new computing infrastructure and upgraded power grids to support large language models and other AI technologies.

Uh-oh, Mag5… ROI concerns now enter the picture.”

 

SPX futures rose to 6040.40 in the overnight session, mostly on a technical bounce.  It remains above the 50-day Moving Average at 5982.17, which may bear watching today.  The Cycles Model suggests negative momentum may be building toward the weekend, when we may see another burst of downside energy.

Today’s options chain shows that Max Pain is at the hotly contested 6000.00 strike.  Long gamma may strengthen above 6050.00 while short gamma resides beneath 5975.00.  Sentiment is leaning short.

ZeroHedge reports, “US futures rose slightly after Monday’s rout over valuations in the artificial-intelligence sector, while the dollar advanced after US President Donald Trump said he wants to enact across-the-board tariffs that are “much bigger” than 2.5%. After suffering a record drop on Monday, Nvidia led a rebound in premarket trading one day after Chinese upstart DeepSeek prompted traders to rethink the extent of US tech dominance. As of 8:00am ET, futures on the Nasdaq 100 rose about 0.2% after the tech index suffered its worst one-day drop since mid-December as Nvidia shares climbed as much as 5% in premarket, poised to claw back some of their 17% slump. Contracts tracking the S&P 500 gained 0.2% with semis poised to recoup some of yesterday’s losses. In Europe, stocks climbed on the back of upbeat earnings. Keep an eye on USD and bond yields, which moved higher as Trump looked set to add a blanket tariff on Feb 1 which could start with a 2.5% blanket tariff and ramp from there. The commodity complex is seeing strength in Energy, weakness in Ags, and Metals are mixed. Today’s macro focus is on Durable/Cap Goods, Housing Pricing, Consumer Confidence, and regional activity indicators ahead of tomorrow’s Fed decision. Starbucks, GM and Boeing are among companies to report results today.”

 

 

VIX futures edged down to an overnight low at 17.46, but appears ready to spring back into action.  The Cycles Model shows a buildup of trending strength, which may show itself over the weekend again.  (Are the Chinese preparing another surprise?)

 

TNX  may have made its Master Cycle low yesterday, on day 256.  There is a diminishing possibility of yet another low.  However, time is not favorable for such an event.  This is yet another double reversal event happening during the month of January.  $44 billion in 7-year Treasury Notes will be at auction today.

ZeroHedge reports, “90 minutes after a mediocre 2Y auction hit the tape, the Treasury sold $70BN in 5Y paper in the day’s second auction to start the Fed-abbreviated week, which also sees a 7Y sale tomorrow before the FOMC on Wednesday.

The auction stopped at a high yield of 4.330% which was down from 4.478% in December, and also stopped through the When Issued 4.336% by 0.6bps – this was the third consecutive through auction in a row and followed 4 consecutive tails as sentiment has clearly improved toward the belly of the curve.”

 

 

Bitcoin is in consolidation today.  The Cycles Model suggests a possible three weeks of decline ahead.  Volatility is due to increase imminently, which may accentuate the decline.

 

 

 

 

 

Posted in Published | Comments Off on January 28, 2025

January 27, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

 

3:32pm

SPX is being held at the 50-day Moving Average at 5981.00.  Dealers are doing their best not to let short gamma become shorter gamma.  Inevitably, SPX may still decline to the 100-day trendline at 5900.00.This decline may have been just too surprising for everyone.  Today ‘s move is called an island reversal, a classic reversal pattern.

ZeroHedge comments, “‘m not sure that “software will eat the world,” but it could consume the stock market bubble in a single gulp.

Is DeepSeek a Sputnik Moment? Let’s break it down. The Soviet Union’s October 1957 launch of the world’s first artificial satellite, Sputnik 1, stunned the U.S., which reckoned it had a commanding lead in “the Space Race.” (It turns out the U.S. had the capability of launching a satellite before Sputnik, but held off for various reasons.)”

 

:00 am

NDX was stopped at the trendline and Cycle Top resistance at 22069.86 and did not make a new all time high last week.  This morning NDX futures plummeted 6% to 20632.20, possibly finding support at the 100-day Moving Average at 20575.00 and the January 13 low at 20538.33.  It bounced, gaining back roughly 2% as I write.  But the damage is done.  Investors who bought the top tick in the NDX last week are trying to undo their trade at a loss in a possible limit-down day..  I had warned on Thursday that a Master Cycle high might be imminent last Thursday, but FOMO was too hard to resist for many.  This month we have a double directional change in the Cycles.  The Cycles Model tells us that the new decline may last until the end of March.

ZeroHedge remarks, “There is only one topic on traders’ minds this morning that threatens to upend the multi-year AI bull trend driving chip stocks to record highs: the (extremely) cheaper Chinese DeepSeek response to OpenAI’s ChatGPT, as noted in an overnight piece titled “Goldman Asks If China’s DeepSeek is AI’s Sputnik Moment.”

 

SPX futures declined to 5915.20, finding support at the 15-month trendline at 5900.00, a 3.5% loss over the weekend.    The SPX is not limit down but the NDX very nearly is.  It will be up to the authorities on how to handle this, making it an interesting day.

SPX options chain is in short gamma beneath 6075.00.  This will make it very difficult to recover.

 

VIX futures rose to 22.51 this morning, a 51.5% gain from Friday’s close.  It is on a confirmed buy signal and may continue to be so through the end of March.  Protection is no longer cheap.  In addition, once it climbs above the Cycle Top at 23.62, the pullbacks may be shallow, making it difficult to buy market protection.

Wednesday’s options chain shows only long gamma above 17.00, which strengthens above 20.00.  There is a singular lack of vision, as the top cache of calls has a strike at 30.00.

 

TNX has resumed its decline to the trendline at 44.00 or possibly mid-Cycle support at 42.23.  The Cycles Model suggests there may only be a few days left in the current Master Cycle, so the trendline has the more favorable outlook.

ZeroHedge observes, “The DOGE $2 trillion budget savings goal is crucial to the very future of constitutional democracy and capitalist prosperity in America. In fact, the soaring public debt is now so out of control that the Federal budget threatens to become a self-fueling financial doomsday machine.”

 

Bitcoin sank beneath the 50-day Moving Average at98923.00 this morning before a comeback of sorts taking it back above 100,000.  The Cycles Model suggests another possible three weeks of decline may be left in the current Master Cycle.  The sell signal is triggered when BTC closes beneath the 50-day.

 

 

 

 

Posted in Published | Comments Off on January 27, 2025