The Practical Investor

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

3:40 pm

Note my earlier comments on the USD.  This move has expanded the correction and the Master Cycle.  It may be over, or nearly so.  This makes more sense from the Cycles perspective.  This morning I noticed something odd about the USD Cycle.  This afternoon explains it all.

3:05 pm

The Japanese Yen has suddenly forged higher, above the 52-day Moving Average at 63.92.  It may be on a buy signal.  This may alter the liquidity picture worldwide, as the Yen carry trade may be threatened.  The Fed has called for a rate check, which may be a warning that a large move such as this may be problematic at many levels.  The Cycles Model suggests this move may last 2-3 weeks.

2:05 pm

BKX has declined beneath its Intermediate support at 166.05.  This confirms the sell signal.  Note the chart above.  The demise of the Yen carry trade may put a big dent in bank earnings.

7:45 am

Good Morning!

SPX futures declined to 6893.40 thus far this morning, falling beneath Short-term support at 6903.00.  Retail investors dropped $12.9 billion into stocks on Tuesday alone, bringing up the Y-T-D total to $45 billion.  Commentators credit that surge to Trump’s “backing down” (TACO) on tariffs.  The real cause of this surge may be more complex, as pension and profit sharing plans were required to make their annual contributions by January 15, most of which went to index mutual funds.  That money may have finally been “put to work” on Tuesday. The mutual fund managers simply took advantage of the dip. The press took the easy way out, citing a possible coincidence, not the real probable causation.  It made a good headline.  The Cycles Model offers short-term support at 6905.00.  Intemediate support lies at 6883.00.  Prepare for an active day where a decline beneath 6900 may bring a surge of selling.

Today’s options chain shows Max Pain at 6910.00.  Long gamma may begin above 6925.00 while short gamma strengthens beneath 6900.00.

ZeroHedge reports, “US stock futures are lower with tech stocks lagging as Intel plunged 14% after the chipmaker warned it was struggling with manufacturing problems leading to poor Q1 guidance.”

The premarket VIX rose to 16.21 this morning.  Despite the pullback, VIX is on a buy signal.  Confirmation comes above the 52-day Moving Average at 17.07.  The Cycles Model shows another week of rally in the current Master Cycle.  However, that may extend into the first week of February.  A very strong Wave 3 is due to arrive imminently.

The January 28 options chain shows a heavy concentration of puts (short gamma) beneath 17.00.  Long gamma starts at 18.00, but not heavily entrenched as of this morning.

TNX may have bounced off the mid-Cycle support at 42.28, or the 200-day Moving Average at 42.35 this morning. Commentators consider the price action in TNX  to be mean-reverting.   However, the Cycles Model suggests the 10-year yield is due to a double boost of strength due this weekend that may propel it toward the Cycle Top resistance at 45.25.

This morning I woke up to the outside temperature at 0 degrees with a wind chill of -17 degrees.  The weekend temperatures are expected to be downright brutal in the Midwest with an expected low tonight in my location of -15 degrees.    Wind chill may be considerably worse.

Spot prices for natural gas shot up nearly 34% in the past month as   consumers in many states may pay considerably more, as preparation for a massive storm event was sorely lacking.

ZeroHedge observes, “US natural gas futures surged as much as 75% over the past week, well above $5/mmBtu, driven by sharply colder weather forecasts (comparable to the 2021 Uri storm that paralyzed Texas’ power grid), ongoing production freeze-offs, and a vicious market trap for bears that unleashed epic short covering.”

USD futures may be i their final corrective phase today.  The Cycles Model suggests a strong surge of trending strength may be imminent.  The Cycles Model shows something odd…The next four weekends show powerful surges, with the current Master Cycle continuing to mid-March.  The inference may be that news events affecting the market may be postponed to the weekends to stifle a negative market reaction.  In the meantime, we may expect one of the longest and strongest trending moves over the next month or more.  Shorts will not be welcome.

Bitcoin may have completed the back-testing of the 52-day Moving Average at 90587.00 this morning, leaving it to resume its decline to the Head & Shoulders target.  The Cycles Model suggests bitcoin may reach its target in the next 2-3 weeks.

Silver has exceeded its price target of 100.00, rising to 101.68 thus far.  While it may go nominally higher, it has achieved it mission on an extended Master Cycle.  Prepare for an imminent reversal..

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

8:30 am

Good Morning!

SPX futures rose to a morning high at 6923.40, then eased down, remaining above yesterday’s intraday high.  The Cycles Model allows this, although this morning’s probe may be the last gasp at recovering the ATH.  The prior six days were preparation for the next fractal, the largest of the series.  At a minimum, the SPX may decline to its November low at 6521.92.  Additional possible targets for this declining fractal may be the mid-Cycle support at 6456.03 or the 1987 trendline at 6030.00-6050.00.  Nothing can be ruled out at this time, although most analysts consider this decline a minor pullback to be bought.  A decline beneath 6800.00 sets this decline in motion.  There is no room for error.  Investor and hedge fund risk taking are at their upper limits.

Today’s options chain shows Max Pain at 6870.00, where the smallest options payout occurs.  Long gamma resides above 6900.00 while short gamma strengthens beneath 6850.00.

ZeroHedge reports, “US equity futures and global stocks are sharply higher as the S&P again marches toward a new ATH while the latest vol spike subsides, after Trump’s tariff pivot eased geopolitical fears, though Greenland and other flashpoints mean the optimistic mood is laced with some caution.”

The pre-market VIX declined further, to 15.88, near the trendline.  This has been an unusual formation, in that the impulse took only one-third of the rise from the bottom, while the correction overpowered it, rising to 20.99.  It did the job, but it was ugly.  The Cycles Model suggests the correction may be complete, or nearly so, allowing the rally to reassert itself.

The January 28 options chain shows Max Pain at 18.00.  Short gamma occupies the chain between 15.00 and 17.00.  Long gamma begins at 19.00 and may stretch to 40.00.  Options sentiment is changing.

The US 10-year bond yield futures declined to the mid-Cycle support at 42.24 this morning, suggesting a short decline to support before resuming its rally.  Trending strength may resume today or tomorrow, propelling TNX significantly higher.  The current Master Cycle runs to mid-February, so a probe to the Cycle Top at 45.25 may be the next target.

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

3:25 pm

SPX has begun its decline and is beneath Intermediate support at 6881.00 as I write.  This reinstates the sell signal for those who went long or cash.  By Friday, the SPX may be beneath the 8-month trendline currently at 6785.00-6790.00.

8:10 am

Good Morning!

SPX futures bounced overnight, but gave it all back this morning.  It is currently searching for a new low,, having declined to 6881.70 thus far.  The 8-month trendline lies at 6775.00, where the next possible bounce may occur.  Should SPX decline substantially through that level, the next possible support may lie at 6700.00.  A recent survey found investors not only the most bullish since July 2021, but the least hedged.  The Cycles Model suggests another wave of panic selling may arrive by Friday followed may another two weeks of decline.  This is not a good combination.

Today’s options chain shows Max Pain at 6845.00.  Long gamma resides above 6860.00 while sort gamma becomes strong beneath 6825.00.  SPX is deep in short gamma presently.  Dealers are likely under instructions to claw back to 6845.00 by the end of the day.

ZeroHedge reports, “Futures have reversed modest overnight gains and are trading near session lows while small caps continue to outperform (for a record 12th day in a row) even as Japanese and global bond yields stabilize and the market awaits today’s major catalysts including Trump’s speech in Davos…”

The premarket VIX has declined  this morning to 19.11, signaling a possible bounce in the SPX later today.  A correction may bring the VIX back down to the 52-day Moving average at 17.16 in the next day or so.  The VIX has not yet shown extreme panic.  However, the Cycles Model shows the VIX going higher to the end of the month, with a possible extension in to early February.  Triangle formations, when complete, often retrace to their upper limit at 60.13.

The US 10-year bond yield is consolidating after yesterday’s gap higher.  It has been on a buy signal since last Friday and may be ready to go much higher after a brief pullback.  The trend strengthens again on Friday and through the weekend, with another surge at the end of the month.  The minimal high may be the Cycle Top resistance at 46.25.  However, Treingles are often retraced to their top, which is 49.97.

USD may have completed a short pullback yesterday and the probability of a resumption of the rally may be increasing.  The mid-Cycle resistance is at 98.65 while the 52-day Moving Average is at 98.92.  Aove either level may reinstate the buy signal.  The Cycles Model infers that the uptrend may continue to mid-April.  It may be fueled by dollar short covering, especially when the USD rises above the November high.

Bitcoin rose to 90987.00 this morning, above the 52-day Moving Average at 90270.00.  However, it has come back down to re-cross the 52-day as the decline may resume today.   Fractal analysis suggests a possible decline to 70600.00 while the Head & Shoulders formation infers a minimum decline to 71500.00.  These possible targets may be seen in the next two weeks.

Silver futures have declined to a morning low at 92.14.  The January 15 high at 93.57 remains the top of that Cycle.  Silver futures traded for as much at 95.77 on that date as dealers charged more than $2.00 premium over the spot price.  Today the futures showed a high at 95.43, which may break the January 15 high.  Investors “feel” as if silver is heading higher, but it may not be so.  The Cycles Model suggests that silver may start a decline to early April as investors take profits and those who are margined may have to cover.

Gold futures rose overnight to a high at 4890.00, hitting trendline resistance.  It may have maxed out its current Master Cycle at 280 days.  Should that be so, a decline may develop that could last to early April.

Crude oil bounced from its 52-day Moving Average at 58.63, rising this morning to 60.87 and completing a retracement.  Today we may see the decline resume with strength in its downtrend coming back this weekend.  This time the Head & Shoulders neckline may not lend its support as the Cycles Model calls for a decline to early March.

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

2:45 pm

SPX is beneath the 52-day Moving Average at 6831.41.  A confirmed sell.

12:50 pm

BKX is testing its Intermediate support at 165.05 and may break through shortly.  It is currently on an aggressive sell signal, which usually means “Lower your exposure.”  A decline beneath 165.00 gives a confirmed sell signal.  The next two weeks may give a foretaste of what may follow in the next month.

7:45 am

Good Morning!

SPX futures declined to 6813.20 over the MLK weekend, beneath the 52-day Moving Average at 6829.03, bouncing off the 8-month trendline near 6800.00.  The bounce may rise to, or above, 6900.00, but the sell signal may have been confirmed.  These high amplitude swings are what is needed to break the uptrend.  Once beneath 6800.00, few will believe that the uptrend is intact.  The Cycles Model implies a decline that may last into early February, followed by a 2-3 week bounce.  Friday may see a resurgence of a panic Cycle, as few are expecting a breakdown in stocks within a week of an all-time high.

Today’s options chain shows Max Pain at 6950.00, while the SPX futures are currently near 6845.00.  It is likely that the dealers may be approaching the REPO window for enough liquidity to retrieve those losses by the end of the day.

ZeroHedge reports, “US equity futures are sharply lower, on pace for their biggest drop of the year, with Beta underperforming. And while geopolitics are the catalyst – as attention remains glued to see what Trump will say next on his Truth Social feed ahead of this week’s Davos meetings…”

The premarket VIX has vaulted to 20.69 over the MLK weekend.    It may retreat back to the 52-day Moving Average at 17.10 later today.  The Cycles Model anticipates a “spike” high near the end of January followed by a brief correction.   Traders are starting to brace for downside volatility this morning. The minimum target may be the April 7 high at 60.13.

Tomorrow’s monthly options chain shows Max Pain at 19.00.  Short gamma resided between 15.50 and 19.00.  Long gamma rests above 20.00 and extends to 100.00 with large institutional positions in the higher echelons.

The US 10-year bond yield futures rose to 43.15 this morning, as inferred by last week’s buy signal.  Volatility may be increasing this week with a possible panic surge by the weekend.  The formation we see in the charts is called a “slingshot.”  It comes at the end of a 2-year Triangle formation whose top is at 49.97.  While the 1-year chart shows the Cycle Top near 45.25, the ultimate target may be 50.00.

USD futures suddenly declined in excess of its 61.8% Fibonacci retracement level, then bounced to Intermediate resistance at 98.60.  The retracement may be over, allowing the USD to break out above resistance at 98.60 to 98.94 (the 52-day Moving Average).  Should it do so, the USD may resume its rally to mid-March.

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The Japanese Yen had bounced from its Cycle Bottom at 62.82 on January 13.  The bounce does not have the qualities of a reversal, giving permission to decline further.  The Cycles Model suggests a lower bottom near the end of the month.  Traders were sellers of Japanese bonds after a tepid 20-year auction earlier today.  The spillover from rising Japanese rates are starting to be felt worldwide.

Bitcoin’s decline may have been temporarily stopped by the 52-day Moving Average at 90311.00.  A bounce may ensue, taking BTC near 95000.00 in the next couple of days.  However, the decline isn’t finished, as it may aim for the Hewad & Shoulders target in the first week of February.

The Silver Index rose to 95.77 this morning, completing its final probe toward 100.00.  The Master Cycle is stretched to its limit, so we may expect to see a reversal imminently.  The Cycles Model suggests a possible surge to 100.00 in the next couple of days, followed by a possible 2-month decline.  The Cycles Model indicates a minimum decline to 60.00 with a possible decline to 30.00.

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

11:20 am

SPX declined beneath the trendline at 6935.00, testing short gamma beneath 6940.00…and didn’t like it.  It has swung back to 6950.00 where long gamma rules.  It needs to stay above the trendline to maintain its uptrend.  A breakdown beneath it brings short gamma into play, setting the stage for a panic decline going into next week.

10:06 am

BKX has ;reversed down from its 61.8% Fibonacci retracement bounce this morning.   A sell signal may be generated with a move beneath Intermediate support at 164.70.  Additionally, the 52-day Moving Average lies at 159.54, beneath which another sell signal may be made.  Finally, a decline beneath the trendline at 151.00 breaks the uptrend.

7:45 am

Good Morning!

SPX futures bounced off the Ending Diagonal trendline at 6935.00 in the overnight session, consolidating beneath yesterday’s high.  The decline is likely to resume today, with an aggressive sell signal beneath the trendline.  The sharp bounce yesterday may have been a result of pension (dumb) money,  combined with buy-the-dip retail investors and dealers attempting to keep the index out of short gamma. Liquidity it thinning while the Mag 7 have been whittled down to 1…Google.  How long can that last?  Upward momentum has been lost.  There are any number of catalysts that may weigh down on equities.  Today we may expect some large moves…going nowhere.

This morning’s monthly options expiration is in.  SPX may open beneath long gamma, which starts above 6950.00.  Today’s closing expiration shows Max Pain at 6945.00.  Long gamma begins above 6950.00 while short gamma may begin beneath 6940.00.  This may be a battle royal to the close.

ZeroHedge reports, “Futures are higher, and trading near record territory, led by tech as this year’s great rotation shows no sign of slowing, broadening the base of names driving Wall Street’s push back towards all time highs. As of 8:00am, S&P 500 futures were 0.3% higher with Nasdaq 100 contracts up 0.4% as the latest wave of enthusiasm for technology stocks carried into Friday.”

The premarket VIX has consolidated above the trendline near 15.35.  The Cycles Model anticipates rising volatility with a possible panic move beginning this weekend.  The next two weeks may be violent in the VIX.  Low volatility does not mean low risk.  The loss of momentum in the Mag 7 leaves the market more sensitive to shocks.

The January 21 options chain shows the VIX may be loaded for bear beneath 17.50 with over 850,000 put contracts.  However, there are 1,580,000 call contracts between 18.00 and 30.00.   Furthermore, there is a buildup of large institutional holdings of calls every 5 points up to 100. This is the first monthly options chain with a preponderance of long gamma in the VIX.

TNX leaped up to 41.97 from its Master Cycle low that bounced from the 52-day Moving Average at 41.29 on Wednesday.  Signs of inflation are mounting.  Trending strength is reappearing today, with a possible breakout above the neckline at 42.05.  The next four weeks show multiple days of strength, suggesting a breakout may lead to a rally to the Cycle Top at 46.25.

The US Dollar Index pulled back to 99.19 after making its Master Cycle high yesterday.  Intermediate support and the mid-Cycle support lie at 98.66, proposing a shallow correction lasting only a few days before the trend reasserts itself.  Next week may bring two panic upside days bringing possible pain to the dollar shorts.  The breakout above the November high may be profound, as short covering dominates the USD.

The Japanese Yen may have a final probe toward 62.00 to complete its Master Cycle.  A reversal may be imminent, as the Bank of japan is conducting its monetary Policy meeting this weekend.  An announcement of higher key interest rates may result, as the BOJ attempts to stem the declining Yen.   A reversal of this declining 10-month trend in the Yen may result, putting pressure on the Yen carry trade, both in rising interest  and rising loan principal.

Silver futures declined to 87.38 in the overnight market, leaving the January 14 ATH intact.  The down candle is the largest since 1980.  The Cycles Model implies a possible two-month correction.  While the word “correction” sounds mild, silver may decline to its mid-Cycle support at 46.92 – a 50% decline from the top.  There is no sell signal yet.  Only caution is advised.

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

8:00 am

Good Morning!

SPX futures rose to 6956.20 this morning, above the Ending Diagonal trendline at 6927.00.  A decline back beneath it may send the SPX to test the 52-day Moving Average at  6825.00 before another, larger bounce.  Amplitude is increasing, but not to the level of panic.  The Cycles Model suggests that panic days may arrive next week and repeat into the first week of February.   Analysts suggest that stocks remain in the primary trend with bounces appearing to make stocks bulletproof.  However it is clear that the degree of difficulty is rising.  This is only the opening act.

Today’s options chain shows Max Pain at 6935.00.  Long gamma may strengthen above 6950.00 while short gamma rises to 6930.00.  This morning’s rally may have been a dealers’ move to rise out of short gamma.  It may not last.

ZeroHedge reports, “US equity futures are higher led by Tech stocks which bounced back on Thursday after chipmaker TSMC revived confidence in the durability of artificial-intelligence demand, as signalling a strong outlook with $56BN in CapEx spending in 2026 (a 25% increase), restoring confidence in global AI growth and sending Europe’s ASML to a record high.”

NDX futures bounced after piercing its 52-day Moving Average at 25345.00, rising to 25755.70.  It must rise above 25 873.00 to have any chance of a new ATH.   Currently  the all-time high remains at October 29 at 26182.00.

The VIX pre-market dropped to 16.02 this morning, remaining above the trendline after breaking above its December high.  The 52-day Moving Average was exceeded, giving a buy signal for the VIX.  The next couple of moves may elevate the VIX to the Cycle Top  before a retracement.  The Cycles Model suggests a panic move may begin this weekend.

The January 21 (monthly) options chain shows Max Pain at 19.00.  Short gamma is very crowded between 14.00 an 18.00.  Long gamma may begin at 20.  There is large institutional presence up to 110.00.  Do they know something that we don’t?

TNX bounced from the 52-day Moving Average yesterday at 41.32, Making a Master Cycle low on its due date.  Bond volatility has crashed since last April, but is starting to show some life again.  A breakout above the Head & Shoulders neckline at 42.05  may create a panic Cycle, sending the TNX toward its Cycle Top at 46.27.  The Cycles Model infers  potential panic days  starting as early as tomorrow with subsequent recurrences through mid-February.

USD rose above its 52-day Moving Average at 98.99 this morning, confirming its buy signal.   The January 9 high at 99.16 may have been the terminus of its Master Cycle.  If so, the USD may phase-shift into a new Master Cycle that has a potential to extend to mid-March.  A breakout above the November high at 100.39 may erupt into massive short covering, fueling the continuation of the rally.

Bitcoin may be reversing from its Master Cycle high made yesterday at 97943.00.  Tis is an example where the Cycle time was stretched to meet the Cycle price beneath the neckline of the Head & Shoulders formation.  The reversal may turn into a sharp decline to the Head & Shoulders target in early February.

Silver futures pulled back to 86.20 from yesterday’s possible Master Cycle high at 93.70.  As warned, silver may correct substantially over the next month.  The amplitude of potential corrective moves may be extreme.  Caution is advised, as the  decline may revisit the lower trendline at 60.00.  The Cycles Model suggests corrective moves may be made until early April.

ZeroHedge reports, “President Trump said on Wednesday he had opted against imposing tariffs on rare earths, lithium and other critical minerals – for now – and instead ordered his administration to seek supplies from international trading partners.”

Gold futures may also be coming off their high at 4650.00 on January 14.  A decline beneath its Cycle Top at 4557.00 may give gold an aggressive sell.  Gold may correct until early April as well.

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

8:00 am

Good Morning!

SPX futures declined to 6925.80 in the pre-market, testing the lower trendline of the 2-month long Ending Diagonal formation. An aggressive sell signal may be found beneath that level.  Further confirmation may be found beneath Intermediate support at 6869.00 while the 52*day Moving Average may be found at 6824.80.  The Cycles Model anticipates a potemtial decline to the week of February 2.

I have received a question about the 25-point surge in the SPX in the final half hour of the day yesterday.  Could it be the Fed getting involved?  Yes and no.  Here are the various factors that increase the intra-day volatility;

1.  Daily and hourly  activity within the Cycles consist of fractals.  Motive fractals occur in a 5-Wave form.  Corrective fractals occur in a 3-Wave form (a-b-c).  C Waves are always 5-Waves of a lesser degree than the motive Waves, appearing very strong, yet failing to overcome the primary motive Wave.  What we saw at yesterday’s close was a terminal Wave C.
2. Seasonality comes into play in January.  Businesses must make their annual bonuses and primary annual pension and profit sharing contribution by January 15.  While personal bonuses may not end up in the market, qualified plan contributions generally go into mutual funds. This lends the market to what is called the January Effect.
3. This leads us to how mutual funds work.  During the day, mutual funds balance out the inflows to the outflows.  At 3:30 pm mutual funds settle with the market by selling excess shares or buying shares with excess cash ion the market.  Yesterday’s final 30-minute surge could very easily have been a result of a flood of qualified plan contributions being put to work by the mutual funds.
4. The next consideration is the options market, which use has grown exponentially.  On Tuesday I noted that Max Pain (the least dealer payout) was at 6970.00, whereas the SPX closed at options expiration at 6963.747, at a minimal payout.  There is a saying that, “The house always wins.”    A commonly held belief is that 90% of all options expire worthless.  While that statistic may be contested, selling options can be very profitable for the dealers.
5. It has been stated by some individuals that the Fed may be buying the market.  While it is common knowledge  that the Bank of Japan owns 80% of the ETFs in the Japanese stock market, the Fed does not directly own stocks as a general rule.  Instead, it supplies liquidity the banking system through the REPO desk.  Since most of the large banks are also dealers, an unknown percentage of REPO may be funneled into the market through dealer banks to promote “market stability.”  The current overnight financing rate is 3.65%, making it an attractive source of funds in market turmoil.

11:00 am

SPX has declined through the Ending Diagonal trendline at 6925.00 to offer an aggressive sell signal.  This gives investors an opportunity to lighten up on their longs and preserve profits.  The next meaningful support lies at 6825.26, where the 52-day Moving Average and previous supports intersect.  The 50-day Moving Average is a point of recognition that the bull market is no longer healthy, investors may use it as a sell signal.

11:43 am

TNX appears to be closing out its Master Cycle at a low.  The MC may be complete by the end of the week.  It is testing its 52-day Moving Average at 41.25 and indications are that it may go as far as the trendline intersection at 40.50 this week.  This may set up a “slingshot effect” where TNX may rally to the Cycle Top at 46.29 in the next 30 days.

Zerohedge reports, “The last coupon auction of the first full week of 2026 was also the strongest one.

Moments ago the Treasury sold $22BN in 30Y paper in a very solid auction: the sale priced at a high yield of 4.825%, just fractionally higher than the 4.773% in December, and also stopped through the When Issued 4.833% by 0.8bps.”

Bitcoin may be completing the final probe of its correction toward the underside of the Head & Shoulders neckline.  It may be due for a 3-4 week decline to the target shown on the chart.

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

3:00 pm

SPX did not succeed in making a new all-time high in the the cash market, while doing so briefly in the futures.  It may be due to continue its decline.  Trendline support is at 6925.00, offering an aggressive sell signal  while the 52-day Moving Average is currently at 6824.50, offering confirmation parallel to an earlier support trendline.  This is not a time to fall asleep at the wheel.

8:00 am

Good Morning!

SPX futures declined to 6960.10 this morning after halting its ascent at 6986.33, reversing from its trendline and short-term Cycle band at 6984.00.  The wedge-shaped formation is known as an Ending Diagonal.  The Cycles Model anticipates a possible 3-4 week decline with possible panic events on the weeks of January 19 and February  2.

9:10 am

SPX futures rose to 6997.40 on the premarket session.  It has since pulled back beneath yesterday’s high.  There may be an attempt at round number resistance at 7000.00 after the open.

Today’s options chain shows Max Pain at 6970.00.  Long gamma rules above 6985.00 while short gamma gains dominance beneath 6925.00.  No surprises expected here.

VIX premarket rose to 15.74 this morning, back above the trendline at 15.25.  It is on a buy signal after yesterday’s breakout, although very few are taking the plunge.  Institutions have been selling the VIX at the lows in the past week.  Yet, VIX may get a jolt of trending strength today that may propel it above the 52-day Moving Average at 17.10, followed by another surge later this week.  The Cycles Model anticipates the rally may last to the end of the month, with a possible extension in February.

Tomorrow’s options chain shows short gamma residing at 14.00-15.00.  Long gamma begins at 16.00, but trails off above 25.00.  Not much concern here with near all-time high valuations.

TNX futures rose to 42.04 this morning while the cash market topped at 41.95.  The neckline of the Head & Shoulders formation lies at 42.05.  The neckline resistance was pricked on January 9, but is consolidating beneath the neckline this morning.  The current Master Cycle is coming to a close this week.  TNX is parked in neutral at this time.  A decline to the 52-day Moving Average at 41.24, or lower, may offer a perfect setup (false flag) for a breakout

ZeroHedge reports, “Shortly after a solid 3Y auction, the first of the year, priced just through the WI by 0.1bps, moments ago we got the first sale of benchmark 10Y paper for 2026 in what was another solid auction.

Today’s sale of $39BN in 10Y paper priced at 4.173% just after 1pm ET. This was barely changed from the 4.175% in December in what appears to be duration paralysis. And with the When Issued trading at 4.180%, the auction stopped through the WI by 0.7bps, this was the strongest 10Y auction since September.”

Bitcoin is consolidating above critical support at 89265.00 where the Intermediate support and 52-day Moving Average lie.  A decline beneath that level offers a confirmed sell signal.  The Cycles Model affirms th Head & Shoulders formation , suggesting the decline may resume for another 4 weeks.  Since Bitcoin may offer insight into international money movements, the decline may signal capital controls being installed in Europe as they prepare for war.

Silver futures rose to 88.54 this morning thus far.  The Cycles Model suggests the next target may be 100.00, but the rally may also end abruptly in the next week or so.  Due care is needed here, as a reflexive move may be panic driven.

Please note:  I have several appointments outside the office for moss of the day.

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;25 PM

There are two basic elements to Cycles; time and price.  Those of you who have been following this blog know that time has been important in determining the length of a Cycle.  This one has gone into overtime, which has led to several missed calls.   The most commonly used Cycle is the 60-day Cycle, which may be recognized about 70% of the time.  But most Cycles analysts go silent when the Cycle doesn’t fit the 60-day pattern, and wait for it to reappear.  The December 26 high at 6945.77 occurred in 58 days from the October 29 high, close enough for a 60-day Cycle, but the Cycle wasn’t finished until today, day 75.  This isn’t the first time that I have concluded that time alone is too one-dimensional.  This illustration is not used to explain the Cycles Model, but to show  the variability within the Cycles.

The Second dimension is price.  For the past two weeks I had consistently called for the top to come in near 6975.00, using trendline analysis, but last week when it should have met the trendline, it fell short.  It was the trading band at 6984.00 that was set to Cycle dimensions that gave us the top today with a very clear signal that the reversal would happen.  There are other dimensions to the Cycles that are based on human behavior in large groups.

12:25 pm

BKX declined solidly beneath its Cycle Top and trendline at 171.65 today.  This action gives an aggressive sell signal that may be confirmed in a decline beneath Intermediate support at 162.72 with further support and signals given beneath the 52-day Moving Average at 158.14.  This reversal is not to be ignored, as the BKX may be a proxy for market liquidity.  The critical larger banks are expected to post lower revenue growth from trading gains this past quarter, but investment-banking fees are expected to remain robust.  The key may be which significant banks got caught in the silver meltdown at the end of the year.

7:45 am

Good Morning!

SPX futures tested round number support and the short-term trendline at 6900.00, making a low of 6911.00.  Beneath that level one may find an aggressive sell signal, which may be confirmed beneath Intermediate support at 6850.20 and the 52-day Moving Average at 6821.60.  Some major players have exited the market over the weekend and we are now in a testing phase, to see if the various support levels hold.  The Cycles Model indicates that the Master Cycle may be complete as of Friday, with a high probability of a change in trend.

Today’s options chain shows Max Pain at 6970.00 Long gamma may increase above 6990.00-7000.0 while short gamma becomes strong beneath 6925.00.

ZeroHedge reports, “Sell America” is back: US equity futures and other US assets – including the dollar – are lower (even as Europe and Asia rise) while precious metals surge to new record highs after the DOJ subpoenaed the Fed and launched a criminal probe into Jerome Powell; ongoing protests in Iran are also denting sentiment.”

The pre-market VIX rose to a morning high at 16.68 thus far.  It is now above the trendline, offering an aggressive buy signal.  Confirmation tof the buy signal rests above the 52-day Moving Average at 17.18 while the mid-Cycle resistance lies at 17.95.  The Cycles Model ha s put a potential panic label on the VIX this week.  A significant breakout is possible.

The January 14 options chain shows short gamma nestled in the range of 14.00-15.00.  Long gamma begins at 16.00 and tapers off at 30.00.  Today’s move has caught many investors unawares.

The US 10-year bond yield appears to be consolidating under the Head & Shoulders neckline at 42.05 after breaking through on Friday.  The Cycles Model suggests that, while the current Master Cycle may be ending this week, it may do so in strength, despite efforts to curb interest rates.

USD futures may have made its Master Cycle high on Friday.  Today it has pulled back from the 52-day Moving Average at 99.04 to Intermediate support at 98.64.  This suggests either a decline or short-term consolidation over the next week.

The Japanese Yen may have bounced this morning, but the Cycles Model suggests a further decline to go before a significant reversal.  The next support may be the Cycle Bottom at 62.95.  The final probe and reversal may occur this week.  The next policy meeting for the Bank of Japan will be held on January 22-23.  Speculation that the BOJ may hike key interest rates further may strengthen the Yen.

Bitcoin bounced from round number support at 90000.00 this morning.  It made its Master Cycle high at 94804.00 last Monday and is due to decline to the first week of February.  The Head & Shoulders formation is still active, suggesting a significant new low may be made.

Silver hit a new all-time high at 82.81 this morning.  This breakout may last up to two more weeks, with a potential target near 90.00 to 100.00.  The action in silver is getting interesting, as the source of supply has diminished at the same time that demand is growing.

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!

SPX futures have edged modestly higher in a retracement , possibly to 6935.00-6940.00.  The reversal from the all-time high at 6965.69 may be in its early stages where efforts are being made to claw back losses.  It is ascertainable that each successive surge higher has been shorter, as it was met with growing resistance.  The formation being considered is called a rising wedge or Ending Diagonal.  See yesterday’s end-of-day commentary.  The bottom trendline of the Ending Diagonal lies near 6875.00, offering an aggressive sell signal.  Intermediate support is at 6830.00 while the 52-day Moving Average lies at 6817.00, confirming the sell signal.

Today’s options chain shows Max Pain at 6920.00.  Long gamma may begin above 6950.00 while short gamma rules beneath 6900.00.

ZeroHedge reports, “Stock futures are muted, with traders awaiting two major catalysts: A possible Supreme Court ruling on whether Trump’s tariffs are legal and December payrolls — a key datapoint for the trajectory of interest rates.”

VIX pre-market is consolidating near yesterday’s high and above the trendline at 15.40.  It may be due for a surge as trending strength comes into play this weekend.  A panic Cycle may develop over the next week as investors become alarmed and rush to hedge their portfolios.  What may cause the alarm?  Earnings may disappoint.  Global tensions may increase.  A couple of significant banks will have to reveal their losses in the silver trade.  CREs and consumer loans may be problematic.   Potentially rising interest rates may dim future prospects.  And Wall Street remains bullish.

The January 14 options chain turns bullish above 16.00.  Significant put holdings at 15.00-16.00 indicate growing dealer positioning, since they must take the opposite side of the trade.   The pot is starting to boil.

Speaking of the pot starting to boil…TNX has punctured the neckline of the Head & Shoulders formation at 42.05.  US 10-Year Bond futures reached a high of 42.15 thus far this morning.  While the Cycles Model only anticipates another week of rally, the Head & Shoulders target may be in view, despite Trump’s attempt at another QE.

ZeroHedge reports, “Shares of LoanDepot, Rocket Companies, and Opendoor Technologies surged in premarket trading after President Trump signaled plans to push Freddie Mac and Fannie Mae to purchase $200 billion in mortgage-backed securities, a move aimed at driving down mortgage rates and improving affordability ahead of the midterm election cycle.”

USD futures have briefly risen above the 52-day Moving Average at 99.04, signaling a possible breakout.  It is unusual to see a breakout this late in a Master Cycle (day 263).  This proposes a couple of possibilities.  The first (and highest) view is that USD may extend its Master Cycle another week, elevating it to the Cycle Top at 100.57.  An alternative view projects a possible phase-shift, where the USD may simply merge into the new Master Cycle without correcting,   A third possibility shows a possible early Master Cycle low on December 25 at 97.75.  All of these possibilities indicate a rising USD, not debasement. We may get clarity in the next week or so.  In the meantime, the long-suffering dollar shorts are still in the majority.

Bitcoin remains above its 52-day Moving Average at 89269.00 this morning.  There may be some residual strength in the retracement, allowing it to go as high as 92000.00 before resuming its decline.  The Cycles Model suggests the decline may continue to the first week of February.

Silver found support at the trendline at 75.00 in the overnight session.  The bounce may end quickly, as the Cycles Model suggests a short, but sharp decline to the 52-day Moving Average at 59.04 over the next week or so.