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.


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December 8, 2023

8:30 am  Sorry for the delay.  Internet issues being resolved.

Good Morning,

NDX futures have fallen back beneath short-term support at 15906.84, but appears to be bouncing.  NDX is on an aggressive sell and is expected to show increased volatility.

Today’s options chain shows Max Pain at 16000.00 with calls outnumbering puts at a ratio of 2-1.  However, there is an anomalous finding of a large number of puts at 16070.00.

ZeroHedge remarks, “Ahead of today’s jobs report (which we previewed as being focused mostly on the unemployment rate), we said that the whisper was for a stronger report due to the mandatory political talking points for the White House taking credit for all those strikers coming back to work…

… and lo and behold, that’s precisely what happened, with the total number of job gains in November coming in at 199K, above last month’s 150K and, more importantly, well above the consensus forecast of 183K.”


SPX futures continue to consolidate in its two-week trading range.  Support is at 4544.00 where an aggressive sell signal awaits.  This phase of the Cycle takes great patience and alertness, as the long consolidation acts like a coiled spring.

Today’s options chain shows Max Pain at 4580.00-4585.00.  Long gamma starts at 4600.00 while short gamma may begin at 4575.00.  Options also appear tightly wound, waiting for a trigger to set off an explosive move in either direction.

ZeroHedge reports, “S equity futures and bonds both dropped after a tech-fueled advance in the previous session, while the dollar and oil gained in what were small moves ahead of the November jobs report while will provide more information on whether the labor market is cooling fast enough to bring the Federal Reserve closer to cut rates as soon as March (full payrolls preview here). As of 7:55am ET, S&P futures dropped 0.1%, erasing a part of Thursday’s rally while Nasdaq futures dropped 0.3%.  Treasury 10-year yields approached 4.2%, rising for a second day. The dollar was little changed as the Japanese yen weakened, paring its biggest gain since January, while the Canadian dollar reversed four sessions of losses to edge higher. Oil futures rose 1.5% from the lowest closing level since July. In macro, the day’s big event is the jobs report where consensus expects a 183K print and unemployment remaining flat at 3.9%


But, after the jobs report, the markets are confused.  ZeroHedge observes, “Flat wage growth (hotter than expected MoM), lower unemployment rate (good news is bad news), more jobs added (good news is bad news)… but the narrative-delivers claim “goldilocks”.

This looks anything but goldilocks and the kneejerk reactions agreed with rates and the dollar higher (hawkish) and stocks lower.

But that has basically all been unwound now.

Dollar is down…



VIX futures briefly spiked to 13.17before moving lower this morning.  VIX is another tightly wound spring, ready to violently break out.  The Cycles Model calls for trending (upside) strength to return early next week.

Next Wednesday’s options chain shows Max Pain at 16.00.  Short gamma reigns from 12.00 to 15.00.  Long gamma of any consequence is not to be found.


TNX lurched higher to 42.79, before subsiding, still at a substantial increase.







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December 7, 2023

10:31 am

BKX, our liquidity proxy, has met its Cycle Top yesterday at 88.56 on day 257 of the Master Cycle.  It has made a Key Reversal, as well.  The month-long rally in BKX mirrored the decline in TNX within 31.42 days.  Are banks little more than mortgage REITS?  If so, the articles below have significance.

ZeroHedge observes, “At the Sohn Conference in London on Wednesday, Carson Block, the founder of Muddy Waters Research, warned that Blackstone’s Mortgage Trust (BXMT) is facing a “perfect macro storm.” He suggested that a crisis in commercial real estate could potentially lead to a “liquidity crisis” in the trust.

Block told attendees at Sohn that Muddy Waters is short BXMT because “borrowers will be unable to refinance and repay” the trust. He cautioned that BXMT is at “risk of a liquidity crisis” and explained, “This is not a story where bad people have done bad things, they are just unlucky.”

ZeroHedge comments further, “The Federal Reserve’s reverse repo (RRP) facility has been a key support for liquidity and stocks this year. But it is falling. As it approaches zero, markets face much less benign conditions as a formidable tailwind is extinguished.

Everyone’s a plumber, or at least should be.

Not in the sense that we all need to get handy with a spanner, but in that every investor should have at least a basic knowledge of financial plumbing in the modern central-banking regime.

A good place to start is the Fed’s RRP facility.”


8:00 am

Good Morning!

NDX futures have declined to a morning low of 15769.40, beneath Short-term support at 16877.91, before a bounce.  It is on an aggressive sell signal.  The signal becomes confirmed beneath Intermediate support at 15335.75.  The 50-day Moving Average is at 15180.91.  The new Master Cycle in the NDX has passed the Cyclical marker of one standard deviation in time from its high, reducing the capability of making a new high to approximately 10% or less.    Bullish momentum may now be dead.

Today’s options chain shows Max Pain at 15880.00.  Long gamma may start at 15900.00 while short gamma begins at 15850.00.

ZeroHedge remarks, “The latest quarterly hedge fund monitor report from Goldman (discussed here) was, as usual, an informative snapshot into the stock and flows of the fast (if no longer smart) money, but most importantly, revealed that – as most had long expected – hedge funds are nothing more than glorified momentum chasers (aka “levered beta monkeys”), with Goldman’s Ben Snider revealing that “hedge fund crowding reaches new records as popular positions enjoy momentum” …



SPX futures made a new low at 4543.10 as bullish momentum withers.  Short term support (not shown on the daily chart) is at 4534.11, where an aggressive sell signal awaits.  The 100-day Moving Average is at 4421.80, where a confirmed sell signal lies.  SPX is now approaching 3 weeks of relatively flat performance, a rarity that may not last.  New to the chart is a Head & Shoulders formation that most analysts won’t catch.  This implies that the SPX may revisit the October 2022 low in the decline that follows..

Today ‘s Options chain shows Max Pain at 4580.00.  Long gamma may start at 4600.00 while short gamma is running hard beneath 4560.00.  The options market may become unruly.

Zerohedge reports, “S equity futures are mixed with tech outperforming notably, as both GOOG and AMD rose +2.8% and 3.7% pre-mkt, respectively. As of 8:00am ET, S&P futures were up 0.1% to 4,560 and Nasdaq futures gained 0.2%.  10Y Treasury yields rose 5 basis points as Japanese bonds tumbled and the yen surged 1.6% against the dollar amid renewed speculation that the Bank of Japan will scrap the world’s last negative interest-rate regime as soon as the Dec 19 BOJ meeting (spoiler alert: it won’t). Of course, if the BOJ does indeed hike yields, US yields will move sharply higher. Elsewhere, the USD is weaker and commodities are higher led by a rebound in the energy complex; WTI is back above $70. Today’s macro data is on Job Cuts, Initial/Continuing Claims, and Consumer Credit. Tomorrow’s NFP data is the more market moving data.”



VIX futures are rising, hitting 13.28 this morning.  The VIX is coiled like a spring, ready to burst out.

Next Wednesday’s options chain shows a lively interest and possibly Max Pain at 15.00.  Short gamma resides at 14.00 while long gamma rests at 23.00, but little interest above that.  This makes buying protection against a decline very cheap.

ZeroHedge observes, “JPY breaking the huge trend line

JPY continues moving aggressively. We are taking out the big trend line as of writing, trading well below the 100 day moving average. The 200 day is at 142.

Source: Refinitiv

Not all vols are dead

The moves in the JPY are getting relatively little global “attention”. JPY 1 month volatilities at the highest levels since August, while VIX remains in “no care” mode.”



TNX may finally be in reversal on day 265 of its former Master Cycle.  If so, we may see yields rising into the year-end.  The reason that this Cycle has attracted so much attention is that it was “straight down” for 31.42 days, where most Cycles are parabolas.

ZeroHedge remarks, “Extreme Bond-Market Positioning Heralds Pain Trade

Disappointments are the deepest when just about everyone in the markets is positioned for the same outcome.

With the disinflationary narrative in the US evolving in line with the Fed’s estimates, traders are bracing for that definitive inflection point in the economy that will send Treasuries soaring.

In fact, traders are clamoring for bonds relative to stocks at a pace close to the fastest in two decades, possibly setting a low bar for disappointment – and potentially making it the markets’ next big pain trade.


USD futures continue to consolidate their gains above the mid-Cycle support at 103.32.  The Cycles Model infers that the rising dollar may continue to the end of December.


Crude oil made a new low at 69.28 before bouncing.  The last master Cycle may have been completed on November 30.  If so, a bounce may develop to the mid-Cycle resistance at 78.09 before the decline may resume for up to two months, due to the breakdown beneath the November low.   Critical support is at 64.30.

ZeroHedge opines, “It is often useful to contrast rhetoric with reality. The phrase, an “energy transition,” the goal to replace hydrocarbons, has origins that trace back to a 1977 speech by President Jimmy Carter. It was an “address to the nation” that commandeered national media, as is the convention on occasions when presidents seek to deliver momentous news. That address became known, infamously, as the “MEOW” speech because of President Carter framing the “energy challenge” as the “moral equivalent of war.” We find a lot of familiar rhetorical turns of phrase in that speech, not least the urgent need for a putative “energy transition” as being “the greatest challenge that our country will face during our lifetime,” and the need to “act quickly” in order to “have a decent world for our children and our grandchildren.” Back then, the urgency was motivated by the belief the world was running out of oil and natural gas.”


Gold futures are consolidating beneath the Cycle Top, on a sell signal.  The next critical 9intermediate) support is at 1999.73.  Probable reversal areas are the Neckline at 1825.00 and its target at 1561.00.  This decline may last through the end of January.



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December 6, 2023

10:50 am

BKX has hit the Cycle Top at 88.56 this morning and may be in reversal, as it has declined to 88.04 as I write.

9:46 am

BKX, our liquidity proxy, is fast approaching its nemesis, the Cycle Top at 88.56 on day 257 of its Master Cycle.   The “firehose of liquidity” was meant to keep the banking system alive, only to sputter out at the peak.  There may be yet another day of rally, but once it hits the Cycle Top, the curtain is drawn.  The Cycles Model suggests the decline may extend in force to mid-January.

ZeroHedge remarks, “Several weeks ago, as the Fed’s Overnight Reverse Repo tumbled below $900 billion for the first time since June 2021 amid a growing debate of where and when the Fed’s reserve scarcity constraint will be hit, we warned that liquidity is rapidly approaching the reverse repo constraint level which could emerge as soon as the RRP facility dropped to $700 billion, at which point the market’s all-important credit plumbing will start to crack.”


8:10 am

Good Morning!

NDX futures rose to 15961.00 this morning in a bounce off Short-term support at 15847.00.  Overhead resistance is near 16000.00.  Today may be the last test of 16000.00 as money flows have weakened.  Money flows have come from (1) Short covering, (2) Massive stock buy backs, coupled with insider selling, (3) A virtual firehose of liquidity from the Fed, (4) Wishful thinking that the Fed would soon ease and (5) Overconcentration in the Magnificent seven (see below).

Today’s options chain shows Max Pain at 16000.00, a highly contested level.  Dealers have taken short positions at 100 point intervals beneath that level, while there is little long gamma left.

ZeroHedge remarks, “Over the weekend, when observing the multiple violent rotations taking place below the market’s remarkably calm surface following November’s frenzied breakout, we pointed one that stood out like a sore thumbthe rotation out of the “Magnificent 7” recent market darlings and into “trash” companies such as non-profitable tech. And even after a modest reversal in this trend today, one can still see just how out of favor the formerly most desired companies have become at the expense of some of the worst of the lot (the thinking is that the Fed slashing rates so fast it would imply the US is in a brutal recession in 2024 is somehow good for said “trash” companies).



SPX futures are at 4583.90 this morning in what may be the final probe at 4600.00, as well.  The global equities Cycle is near its top at the time that the liquidity plug may be pulled.  The Cycles Model is neutral this week, aside from Friday’s Master Cycle high, made on day 263.   The chance of another high has decreased substantially.

Today’s options chain shows Max Pain at 4570.00.  Long gamma starts at 4575.00 while short gamma may begin at 4550.00.

ZeroHedge reports, “US equities were set for modest gains on Wednesday even as they drifted lower from session highs, as a weakening labor market boosted bets that the Federal Reserve is done with interest-rate hikes and could pivot to monetary easing sooner, even as we are approach levels of priced-in rate cuts which some say guarantee a recession. As of 7:30am ET S&P 500 futures were up 0.1% to 4,581.50, wile Nasdaq futures rose 0.3%. Asian stocks rebounded from a three-day losing streak, while Europe’s Stoxx 600 index traded near the highest level in four months. A rally in bonds stalled with the US 10-year yield rising toward 4.2%. The US Dollar is lower, its first down day this week. Commodities are mixed with Energy weaker, Ags stronger, and base outperforming precious. Bitcoin traded close to the $44,000 mark in the longest winning streak for the largest cryptocurrency since May, fanned by expectations of looser monetary policy. The macro data focus today is on ADP, 23Q3 readings on productivity/labor costs, mortgage applications, and the trade balance.”



VIX futures sank to 12.69 this morning before a bounce.  At the same time, VIX may have hit its “floor” on November 24th, which is being tested.  The Cycles Model suggests the remainder of the week may be relatively quiet while trending strength may return early next week.

Today’s options chain shows Max Pain at 14.00.  Short gamma rules from 12.50 to 13.50.  Long gamma starts at 15.00 and may extend to 39.00.


TNX futures hit a new Master Cycle low at 41.37.  The cash market registers its low at 41.40.  Today is day 264 in the Master Cycle, at one standard deviation (in time) from the mean.  That may indicate it’s time for a reversal.  Another indicator is the neckline at 41.00, acting as a very solid support.  In addition TNX shows a double strength indicator, suggesting that the reversal may be dramatic.  Contrary to the sage opinions of the experts, all hell may be about to break loose.

RealInvestmentAdvice comments, “After hiking rates by 5.25% since March 2022, the Fed is in a wait-and-see period, commonly deemed a pause. Since the Fed started hiking rates, inflation has declined meaningfully but remains moderately above the Fed’s 2% target. The economy continues to thrive, fueled by a strong labor market.

Despite the good news, a dark cloud lingers on the horizon. The Fed’s primary fear is that the lag effect of prior rate hikes has yet to impact the economy fully. They desire a soft landing, implying little economic degradation. But a much stronger downturn can’t be ruled out in their minds or ours. Given the odd juxtaposition between strong economic growth and recession fears, a Fed pause is the most likely action.”

ZeroHedge counters, “The rally in Treasuries is beginning to look tired. Yields are moving in lock-step with short-term rate-cut expectations, which are looking overcooked given the loosening in financial conditions has likely helped push the timing of the next NBER recession further out.

Treasuries are becoming progressively overbought after an impressive rally of over 5% since mid-October. The rally was not unexpected as it came off oversold conditions, but the pendulum has, as usual, swung too far in the other direction, where the drop in yields is hard to square with economic expectations.”


USD futures may be consolidating above the mid-Cycle support at 103.31 as the new Master Cycle gains traction.  USD is on a buy signal that may last through the end of the year.  This may have escaped the notice of the investment community.  However, trending strength may be coming back next week.


Crude oil futures are making a new low at 70.56 this morning.  At this rate, the Head & Shoulders target and Master Cycle low may be only days away.  WE are watching this low very carefully, as it may indicate more downside to come.

ZeroHedge remarks, “Oil prices fell for the fourth straight day to close at five-month lows today as US oil exports neared record highs amid record high domestic crude production flooding the market, overshadowing Saudi Arabia’s pledges that OPEC+ will deliver on its planned production cuts.

“The voluntary element of the deal left the markets questioning whether the supply reduction would actually come into effect,” said Fiona Cincotta, financial market analyst at StoneX.

Meanwhile, the demand outlook is being hurt by rising concerns about China, she said.”


Gold futures are consolidating and may retest  the Cycle Top at 2056.14 before moving lower.  The Cycles Model suggests the new trend may last to the end of the year.  What happens after that depends on how much damage is done to the uptrend.


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December 5, 2023

10:45 am

GKX appears to be on a buy signal, but with only 1-2 weeks left in the current Master Cycle, there is a risk of another low.  Liquidity is becoming rarer and some domestic agricultural commodities are still declining.

ZeroHedge observes, “Corn prices tumbled to a three-year low as mounting supplies from the US and Brazil collided with sliding demand. This downturn helped push down the Bloomberg Grain Spot Subindex, which tracks near-term futures contracts for soybeans, corn, and wheat, leading to its largest annual decline in a decade.

Bloomberg Grain Spot Subindex records the worst yearly slump since 2013.

Ag traders are waiting for a US Department of Agriculture’s monthly WASDE report on Friday to gauge the status of foreign and domestic harvests.”


10:20 am

BKX may have begun its descent today, on day 256 of the current Master Cycle.  The Cycle Top at 88.50 has not bee reached, leaving room for a small probe higher.  However, it may not be profitable waiting for the last tick, should there be one.  It appears that, should the reversal be in effect, the decline may last to the January options expiration.  The Head & Shoulders formation is in effect.


8:00 am

Good Morning!

NDX futures are lower, but within yesterday’s trading range, having bounced at 15732.00.  It is beneath the Short-term support at 15836.00, giving it an aggressive sell signal.  The next level of support where the confirmed sell signal lies is at 15287.67.  The Cycles Model suggests new strength may be added to the decline today.

Today’s options chain shows Max Pain at 15830.00, where both types of investors have the least gain.  Long gamma starts at 15900.00 while short gamma begins at 15800.00.

ZeroHedge comments, ” While we have discussed the various micro drivers and catalysts behind the “November to Remember”, which included record buying by CTAs, record stock repurchases by corporations (more than $5bn per day), record dealer gamma, a brutal hedge fund short squeeze, a flood of retail buying of meme stocks, favorable seasonals and a Q3 earnings season that came in stronger than expected and ended the earnings recession of the past year, one may as well just forget about all of these and simply consider the macro elephant in the room, by which we mean the monster liquidity injection by central banks – and especially the Fed – last month.

According to Goldman calculations (available to pro subs in the latest must read Global liquidity update” report), with $350BN added in November, liquidity (in USD terms) from the G4 central banks + the PBOC was nothing short of a fire hose.”


SPX futures are trading at the lower end of yesterday’s trading range.  It remains above the Short-term support at 4512.00.  One may consider an aggressive short position beneath 4525.00-4537.00.   The Cycles Model suggests a bit of strength may add to the decline today.  The 100-day Moving Average lies at 4421.00, where the sell signal is confirmed.

Today’s options chain shows Max Pain at 4565.00.  Long gamma starts at 4580.00 while short gamma begins at 4530.00.

ZeroHedge reports, “US stocks were set to extend Monday’s drop into a second day after hitting 20-month highs, as the recent rally looks increasingly stretched and traders scale back rate-cut bets while Chinese stocks tumbled to fresh five year lows after Moody’s downgraded China’s credit outlook to negative on soaring debt. As of 7:40am ET, S&P 500 futures slid 0.4%, trading at session lows, after the benchmark rose last week to its highest since March 2022 on bets the Fed would soon pivot to monetary easing; Nasdaq 100 futures dropped 0.5%. Bond yields eased as did the USD; 10Y TSY yield dropped 2bps to 4.22%. Commodities were seeing a bid within Ags and Energy while metals underperformed on China weakness despite better than expected PMIs. Bitcoin held near a 19-month high, just below the $42,000 mark. Today’s macro data focus is on JOLTS job openings and ISM Services (52.3 consensus vs. 51.8 prior).”



VIX futures are also consolidating.  An aggressive buy signal (apart from the Cycles indicator) lies above 14.30.00.

Wednesday’s options chain shows Max Pain at 14.50.  Short gamma resides between 12.50 and 13.50.  Long gamma rises at 20.00, but not much conviction to 30.00.

ZeroHedge comments, “The perfect flow Tsunami

We have had a perfect flow Tsunami over the past few weeks where “everyone” needed to buy equities. This has played out now and, more than on the margin, things will get incrementally less supportive from here. Our experience is that inflection points like these are normally a good time to put on short term tactical shorts. And guess what, doing it via options is record cheap & attractive.

Holding out for the last $20bn…?

Do you fade the CTAs here after close to $100bn of fast buying in US equities or do you wait for them to go back to historic max longs that would imply a $20bn or so of more buying?”



TNX made a new Master Cycle low at 41.99 on day 264.00.  An extension such as this is not unusual, being less than 1 standard deviation from the mean.  Once the reversal is complete, we may see TNX rally to the first week of January.  The ;target may be 53.00 or higher.

ZeroHedge remarks, “Front-end Treasuries have rallied big in the past month, but labor market data will pose a key test for traders this week.

Yes, Federal Reserve Chair Jerome Powell did reiterate on Friday that the central bank is prepared to tighten policy further, but was just jawboning against the recent loosening of financial conditions rather than a statement of real intent given the clear disinflationary momentum we have seen of late.

The two-year Treasury yield, which was hovering around 5% before softer-than-inflation readings for October, has since shed some 40 basis points. While the decline has made the maturity look rather rich on the curve, some optimism is justified by comments from Governor Christopher Waller who became the first Fed official to explicitly open the door to rate cuts.”

However, ZeroHedge observes, “Expectations of rate cuts in the US are liable to come unstuck as easing financial conditions raise the risk the Federal Reserve returns to the fold with another hike…

Be careful what you wish for.

The market’s increasing zeal for lower rates has rekindled the so-called everything rally. But if it persists it contains the seeds of its own destruction as it ultimately pushes the Fed to recommence raising rates, wrongfooting growing expectations of rate cuts, and leaves stocks and bonds prone to selling off.”


USD futures are consolidating in the high end of yesterday’s trading range.  It made a buy signal on Friday and is expected to continue rising to the end of December.  The likely target may be the neckline of the Head & Shoulders formation near 107.50.



Gold futures are even lower today, at 2033.55 after a Key Reversal made yesterday.  Last Friday I had a private conference on gold, where I opined that it could not make a new high.  I was wrong on that count.  However, my reasoning was that gold was due for a strong reversal early this week, which did take place.  The Cycles Model suggests the decline may last to the end of December.  The tow targets may be the mid-Cycle support at 1965.00 or the 50-day Moving Average at 1957.00.


Crude oil futures made a new low at 72.18 before a slight bounce.  The sell signal remains in effect until the end of the month.  The Head & Shoulders target is in effect with strong support at the Cycle Bottom at 65.08.  A drop beneath 63.57 may forecast a further decline.





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December 4, 2023

3:50 pm

BKX is nearing its Cycle Top resistance at 88.43 today, day 255.  That means a high likelihood of a reversal tis week.  The Head & Shoulders target is still active and may influence the outcome of the new Master Cycle that extends through mid-January.  Prepare yourselves.  Bank runs are no fun.

XeroHedge observes, “The Secretary of the Treasury and the Financial Stability Oversight Council would like you to believe that climate-change and unregulated non-bank financial institutions are the biggest threats to financial stability. If financial regulators were actually safeguarding the integrity of banks and financial markets, they would recognize, and do something about, the largest immediate threat to financial stability: the nearly $1.3 trillion of unrealized interest rate related losses in the regulated banking system.  This is the real systemic risk today.

The $1.3 trillion is my estimate of the banking system’s total unrealized interest rate related losses as of June 30, 2023. Using bank regulatory data, I estimate that the banking system has total unrealized losses of about $548 billion on bank-owned securities and about $726 billion in interest rate driven losses on bank loan and lease portfolios.”


10:15 am  Technical difficulties… we are not getting updated charts

Good Morning!

SPX futures have declined to a low of 4555.60 this morning.  Short-term support lies at 4537.00-4542.40.  An aggressive sell signal may be given beneath that level.

Today’s options chain shows Max Pain at 4585.00  Long gamma starts at 4600.00 while short gamma begins at 4570.00.

ZeroHedge reports, “US equity futures, most European bourses and Asian markets as well as global bonds all retreated after five consecutive weeks of gains, as traders paused to digest November’s blockbuster rally and to consider the case for interest rate cuts, which they aggressively priced in after Powell’s “not as hawkish as feared” fireside chat on Friday. As of 8am ET, S&P futures were lower by 0.3%, dropping back below the 4,600 unwinding a portion of Friday session rally (which however left hedge fund bruised and battered as the most shorted stock soared much more than the HF VIP basket); USD is stronger and commodities are weaker: crude futures are lower by around 0.4%, adding to Friday losses; 10-year Treasury yields added five basis points to 4.25%. Despite the rise in the DXY, Bitcoin surged past $41,000, while gold briefly touched an all time high. With the Fed in its blackout window, the macro data releases will be the key focus; no treasury auctions this week. Today, that focus is on factory orders and durable/cap goods; this week we get a deluge of labor data starting with the latest reading on US job openings (or JOLTS) tomorrow, followed by ADP’s National Employment Report on Wednesday and non-farm payrolls on Friday.”



VIX futures have elevated to a morning high of 13.70 thus far.  A breakout above 14.30 gives us an aggressive buy signal.

Wednesday’s options chain shows Max Pain at 14.50  Short gamma may exist between 12.50 and 14.00.  Long gamma may start at 15.00 but it is not well populated.


TNX has risen to 42.91 thus far this morning.  Futures made a new low this morning at 41.96, ending the old Master Cycle on day 263.  The Cycles Model indicated a high level of positive trending strength arriving tomorrow.

ZeroHedge observes, “There are fertile conditions for volatile markets this week as a raft of labor data is released at the same time as liquidity sees a sizable drop versus last month’s buoyant conditions. With positioning in bonds now very long, yields are at risk of rising, triggering a selloff in stocks.

Focus returns to the US labor market this week as JOLTS, ADP, Challenger layoffs, ISM services employment and payrolls are released.

The jobs market is slowing but the question remains: will it deteriorate fast enough to prompt the Federal Reserve to act even sooner than rates markets are expecting?

This comes at the same time as a non-negligible drop in liquidity and skewed positioning in bonds. The JPMorgan Treasury Survey of active clients is registering an all-time high in net longs.”




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December 1, 2023

2:30 pm

SPX may have hit its final resistance at 4600.00 that I had announced on Monday.  Let’s see if it sparks a reversal.  Another interesting point.  At 1:00 pm today the SPX concluded exactly 31.42 market days (PI = 3.1416) from the October 13 high.   In fact, 7 of the 10 reversals this year were at PI intervals.


2:15 pm

BKX is finally reaching its Cycle Top at 88.57 this afternoon, on day 252 of its Master Cycle.  Something is afoot here, since the Cycles Model calls for a possible massive panic decline starting this weekend, or possibly today.  Don’t let this fool you,  There are numerous indicators pointing to some event-driven decline starting this weekend.  Note: this may be a global event.

ZeroHedge reports, “Money-market funds saw a massive $102BN inflow last week (the largest since the middle of the SVB crisis in March). The fifth straight week of inflows pushed total MM fund assets to a new record high of $5.84 TN…”


ZeroHedge further sates, “Unrealized losses on securities held by US banks exploded by 22% in the third quarter.

Of course, unrealized losses don’t really matter — until they do.

This is yet more evidence that the financial crisis that kicked off last March continues to bubble under the surface.

Unrealized losses, primarily on US Treasuries and mortgage-backed securities rose by $126 billion in Q3 and now total $684 billion, according to the FDIC’s quarterly bank data release.”


8:00 am

Good Morning!

NDX futures rose to Short-term resistance at 15986.00 (not shown) this morning before pulling back.  Critical support is at 15745.00, which indicates an aggressive sell zone.  Wednesday’s peak at 16166.50 may have fulfilled all the requirements for a completed Master Cycle at day 261.

Today’s options chain shows Maximum investor pain at 15950.00.  Long gamma starts at 16000.00 while short gamma begins at 15950.00.

ZeroHedge remarks, “A significant miss in the November manufacturing ISM, released later today, leaves stocks open to downside, as overboughtness and less favorable liquidity conditions meet hard-landing fears.

The US manufacturing ISM is one of the most consequential pieces of macro-economic data for markets.

It is the single largest explanatory factor for the performance of global stock markets, it is leading, and it is minimally revised. Last month it surprised to the downside, coming in at 46.7 versus 49 expected.”


SPX futures rose to 4578.00 in the overnight session, then declined back into the red.  Critical support lies at 4489.00, where an aggressive sell signal lies.  Wednesday’s high remains as the probable end of the rising Master Cycle.  Should that be true, the new Master Cycle may decline until mid-January.  The Cycles Model indicates a triple whammy of (downside) strength beginning this weekend, possibly today.

Today’s options chain shows  Max Pain at 4555.00.  Long gamma may begin at 4570.00 while short gamma lies at 4550.00.

ZeroHedge reports, “US futures reversed some of Thursday’s gains to start the final month of the year after a blowout performance in November, as European stocks gained, and Asia stuttered. US Treasuries and the dollar posted small moves before comments from Fed Chair Jerome Powell at 11am ET that may offer clues on the path of interest rates. Oil rebounded after OPEC+ promised further output cuts but was hazy on details. Israel resumed fighting against Hamas in the Gaza Strip after a weeklong truce ended: Israel’s army said Hamas violated the cease-fire terms by firing toward its territory. Bitcoin soared to its highest price so far this year. Base metals are rallying after the strong China Caixin Mfg. PMI results (50.7 s. 49.6 survey vs. 49.5 prior). Today, we get the November ISM-Mfg. at 10am ET (exp. 47.9, last 46.7) and hear from Powell at a “fireside chat” at Spelman College in Atlanta on Friday at 11am ET ahead of Fed’s blackout period. Focus for Powell events is whether he’ll back dovish comments earlier this week by Fed Governor Waller, which spurred a rally across front-end of the Treasuries curve.”


VIX futures are consolidating near the bottom of its trading range.  Last Friday’s Master Cycle low gave warning that the trend is about to change.  Those who follow the VIX realize that downside risk is now minimal.  The change in trend is confirmed above Wednesday’s high at 14.30.

The December 6 options chain shows Max Pain at 14.50.  While short gamma rules between 12.50 to 14.00, long gamma takes over at 15.00.  There’s not a lot of conviction on the long side, but that is how reversals happen at tops and bottoms.

ZeroHedge observes, “VVIX squeezing

The VVIX squeeze we outlined last week continues. The gap vs VIX is huge. Last time the VVIX was here, VIX was at 19 ish…”


TNX is pulling back from yesterday’s high at 43.52.  Support lies near 43.00, while a breakout above 13.52-43.75 offers an aggressive buy signal.  Trending strength returns early next week, giving TNX a boost higher.

ZeroHedge remarks, “Remember, remember, the surge of November…

Global bond and stock markets added over $11 trillion in capitalization in November. That is the second biggest monthly gain in history (Nov 2020 added $12.5 trillion)…

Source: Bloomberg

Who could have seen that coming?”



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November 30, 2023

2:55 pm

As mentioned before, NDX may be the first index to give a sell signal.  Be prepared for a bounce to 16000.00-16060.00 before a larger reversal down.  A decline beneath short-term support at 15744.00 confirms the aggressive sell.  The sell confirmed lies at 15235.00.


10:08 am

GKX, the Ag Index has risen above the 50-day Moving Average at 396.93, confirming a buy signal.  Trending strength may “double up” starting tomorrow and continue through mid-December.  Should the Head & Shoulders neckline be broached, there may be follow-trough to or above the upper trading channel trendline.

ZeroHedge reports, “Rice prices are on the verge of hitting new 15-year highs as the damage effects of the El Nino weather phenomenon across Asia have damaged farmlands, leading to dwindling supplies.

Thai white rice 5% broken hit $640 per ton this week. These prices are back to levels not seen since October 2008. Prices are up over 50% since the start of 2022.”



9:51 am

BKX, our liquidity proxy, is  making a potential Master Cycle high today.  There is every confirmation that the banking Cycle is linked to the bond Cycle (see TNX).  The flush of cash into the banking system has lifted all stocks, especially bank stocks.  Now, on day 251, the Cycle may be over, or imminently so.  The Cycles Model suggests that, if the reversal happens in the next 24 hours, next week could be a bloodbath in BKX.  There is much to speculate about that could cause such an event.

3:00 pm

ZeroHedge  remarks, “Unrealized losses on securities held by US banks exploded by 22% in the third quarter.

Of course, unrealized losses don’t really matter — until they do.

This is yet more evidence that the financial crisis that kicked off last March continues to bubble under the surface.

Unrealized losses, primarily on US Treasuries and mortgage-backed securities rose by $126 billion in Q3 and now total $684 billion, according to the FDIC’s quarterly bank data release.”


7:55 am

Good Morning!

NDX futures consolidated within yesterday’s trading range.  Yesterday was day 261 (of an average 258 days) in the old Master Cycle.  The new Master Cycle may have begun.  A decline beneath Short-term support at 15869.00 may offer an aggressive sell signal.  The next support is the 100-day at 15216.00, confirming the sell signal.  There may be an effort to keep the NDX elevated due to the month-end.

Today’s options chain shows Max Pain at 16040.00.  Long gamma may begin at 16100.00 while short gamma starts at 1620.00.

ZeroHedge remarks, “Shooting star watch

Interesting dynamics playing out on an intra day basis. So far a rather big rejection in equities. Note NASDAQ loves making short term tops with this type of candle….but as always, we need a confirmation.”



SPX futures are attempting a bounce after yesterday’s shooting star formation. This indicates a potential top in this rally, but needs confirmation.  Short-term support is at 4518.00, giving investors a possible aggressive sell signal.  The next nearest support is at the 100-day Moving Average at 4417.00 where the sell signal is confirmed.

Today’s options chain shows Max Pain at 4550.00.  Long gamma starts at 4570.00 while short gamma may begin at 4530.00.

ZeroHedge reports, “US equity futures, European bourses and Asian markets all advanced, and Treasuries steadied at the end of a blistering November run after more dovish comments from hawkish Fed officials this week, and as investors waited for a key US inflation metric for further evidence that price pressure are cooling.  As of 7:55am ET, S&P futures rose 0.3% while US 10-year yields climb 3bp to 4.29%. Treasuries paused their strongest monthly gain since 2008, with yields on 10-year paper up four basis points at 4.30%. The dollar bounced 0.4% at the end of its worst month in a year, sending all major developed- and emerging-market currencies lower. The euro traded down 0.5% versus the greenback as the pace of price growth in the region cooled. Today’s macro focus will be the PCE, Personal Income/Spending and Initial Jobless Claims. The PCE release today will provide us with more details on the disinflation trend in Q4: Consensus sees core PCE printing 3.5% YoY vs. 3.68% prior. Eyes will also be on OPEC+ today as the group may consider a production cut at today’s meeting: RTRS sources said OPEC+ ministers agreed for a preliminary cut for over 1mn bpd.”



VIX futures are also consolidating this morning.  The old Master Cycle appears to have ended last Friday.  Trending strength may be building for a potential breakout this weekend.

The December 6 options chain shows Max Pain at 14.00.  Short gamma dwells at 13.00-13.50.  Long gamma is in short supply, as traders have not yet begun to hedge.


TNX is bouncing back from its Master Cycle low yesterday.  The reversal from the trendline may give an aggressive buy signal, but a stronger signal lies above 44.50, which is short-term resistance (not shown).  The reversal was on time at day 258.  The length of the decline, 37 days, has given traders the impulse to draw straight lines into the future.  They have forgotten that the prior trending rally was 52 days in length and went further than the decline.  The new rally may gain strength early next week as it powers higher into the year-end.

ZeroHedge remarks, “TLT upside mania

What a difference a month makes. We outlined the contrarian TLT logic on October 23, in our post Dare the TLT? The world’s most hated asset back then has reversed and we are trading above the 100 day for the first time since May. The “easy” part of the trade is behind us. For the ones that enjoyed the move, consider switching into call spreads, the VXTLT has come down a lot (chart 2), offering relatively cheap options plays.”



USD futures appear to be consolidating above the mid-Cycle support/resistance at 103.31.  It may have given a buy signal to be confirmed with just a little more elevation.  Yesterday’s key reversal brought an end to the old master Cycle at day 266.  Should that be correct, the new Master Cycle may start with a burst of trending energy over the weekend and last to the end of the year.


Gold futures have dropped to 2034.00 tis morning, below the Cycle Top support at 2063.73.  This has created a sell signal for gold in mid-Cycle.  The Cycles Model also indicates a triple threat of trending strength after the reversal.  This may mean a potential panic decline as gold investors attempt to raise cash.

ZeroHedge observes, “It was almost exactly one year ago when a puzzled market was looking at the suddenly surging price of gold – which erupted from a 2022 low of $1630 in early November to close some $200 higher by year end, in the process diverging dramatically from real interest rates to which it had previously been pegged…

…. and trying to figure out what was behind the sharp move higher.

We were happy to reveal the answer, when we first showed that China had officially resumed its gold purchases in November 2022 for the first time after a three year “quiet period”…”


Crude oil futures rallied to 79.59 this morning on day 255 of the current Master Cycle.  It may attempt to reach Intermediate term resistance at 80.67 while making a top.  Today is day 255 of the current master Cycle, so it may be imminent.

ZeroHedge comments, “Ahead of the already once-delayed OPEC+ virtual meeting tomorrow – which may or may not be delayed again – the leaks, trial balloons and outright manipulation by various cartel delegates is approaching a level that would make the Fed and ECB blush.

In the latest such leak, moments ago the WSJ largely repeated what we already reported last week, namely that to halt the drop in oil price, most OPEC+ members are considering – and in favor of – an additional 1 million barrels per day production cut. And while delegate sources confirmed that Nigeria and Angola, the two biggest African oil producers, still resist a downgrade of their individual quotas, as does the United Arab Emirates, Saudi Arabia is in favor of the new cuts. And what Saudi Arabia wants, it usually gets.”



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November 29, 2023

7:45 am

Good Morning!

My vision is coming back, but not 100%.  I will do my best to give a shortened summary.

NDX futures are consolidating beneath Last Wednesday’s high.  Since NDX has lost its leadership in the rally, it may lead in the decline.  This may become clearer in the next two days.

The NDX options chain shows Max Pain at 16000.00 with puts and calls virtually tied.  Long gamma May begin at 16020.00-16030.00.  Short gamma starts at 15975.00.

ZeroHedge observes, “Pay attention: The bullish narrative is changing

The bullish narrative has changed from mainly flow driven in the beginning of November (it was the perfect storm…) to now being more centered around momentum and seasonals. It is something along the lines of “strength begets strength”. Needless to say, this is a much weaker narrative and we are now looking for short opportunities. Let’s first examine the current bullish narrative and then look at the risks.

Just another overshoot?

NASDAQ has traded inside a range since June basically. We overshot in July, undershot in October and now this latest melt up resulted in an overshoot. Let’s see how this plays out from here, but consensus is strong regarding the Santa rally, but we have diminishing buybacks as well as most of the CTA chasing behind us.


SPX futures made a new high this morning at 4575.50 thus far.  Overhead resistance is near 4580.00.   Today is day 261 of the current Master Cycle.  This is an overshoot, but still within acceptable parameters.   I do not expect SPX to overshoot the July 27 high at 4607.07.

Today’s options chain shows Max Pain at 4555.00.  Long gamma may begin at 4575.00.  Short gamma starts at 4550.00.  This is a close call, waiting for an accident to happen.

ZeroHedge reports, “US equity futures, global markets and Treasuries extended their recent rallyall boosted by expectations that the Federal Reserve is not only done with hjking but will soon pivot and start cut rates early next year; in fact, according to Bill Ackman who has again flipflopped, the Fed will cut as soon as March (i.e., he is now long the same bonds he was so passionately shorting just a few months ago). This occurs as consumer confidence moved higher with holiday, retail sales numbers that illustrate a still strong consumer. As of 7:45am, US equity futures are up 0.4%, rising to the highest since Sept 1 and just shy of 2023 highs, while Nasdaq futures gained 0.6%; gold traded near record high, the dollar slide halted but is certainly not over, WTI oil futures rose 1.7% on the day, adding to Tuesday’s advance, while bitcoin traded just above $38K. The big question now is whether this rally can extend into December; the answer may be predicated on fundamentals rather than positioning/technicals. BBG reporting an uptick in corporate insider buying alongside stronger buyback activity. Today’s macro data focus includes 23Q3 GDP/Consumption/PCE, Beige Book, inventories, trade balance, and mtge applications.”



VIX futures made a low this morning at 12.48 thus far, leaving Friday’s low Day 256) intact.  A breakout above 14.30 may offer a buy signal.

Today’s options chain shows Max Pain at 14.50.  Short gamma runs from 12.50 to 14.00.  Long gamma may begin at 15.00-16.00.

ZeroHedge observes, “Complacent?

BofA deriv team: “With SPX 4550 and VIX 13 at the time of writing, US equities & equity vol appear to be (once again) going all-in on the soft-landing consensus. As noted in our macro outlook, however, it’s dangerous to be overly convicted in any thesis, as few have experienced today’s elevated macro uncertainty in their lifetimes.”

Need cheap hedges?

The 1 month rolling 3% out of the money put goes for 34 basis points, lowest level over the past 5 years. The problem is that most don’t buy protection when they can, but they chase it when they must (more here).”



TNX made a new low today at 42.71 and a possible Master Cycle reversal low, as today is day 258.  Should this be the case, the new Master Cycle may run beyond the end of the year in a rally that may begin the new month in strength.  This suggests a possible financial “accident” may be about to be revealed.  So much for easier financial conditions on their way.

ZeroHedge reports, “While yesterday we at least had a mediocre 5Y auction to wash the bitter taste from the very ugly 2Y sale early in the day, today’s sales of 7Y paper sticks out like a sore thumb. A very ugly sore thumb.

Pricing at a high yield of 4.399%, the stop was more than 50bps lower than last month’s auction (which priced at 4.908% and was the highest on record) and was the lowest since August. However, what spooked markets is that the auction also tailed the When Issued 4.378% by a significant 2.1bps, the biggest since last November and one of the biggest tails on record.

The bid to cover was also ugly: at just 2.44, it was the lowest since April and clearly well below the six-auction average of 2.60.”


USD futures made a probable Master Cycle low this morning at 102.38.  USD has since bounced to 102.90, indicating a possible reversal on day 266 ( within 1 standard deviation in time).  Should that be the case, the Cycles Model suggests the new Master Cycle may begin in strength.




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November 27, 2023

10:25 am

BKX, our liquidity proxy, has been repelled from the 200-day Moving Average, currently at 83.11, twice thus far.  It may be considered on an aggressive sell signal with confirmation at the mid-Cycle support/resistance line at 80.90.  The Fed has been doing a fine job of postponing the inevitable, but it can only last so lang.  Branch closures often precede bank closures. See the articles below.

ZeroHedge observes,The financial crisis that kicked off in March continues to bubble under the surface…

Total outstanding loans in the Federal Reserve’s bank bailout program jumped by just over $5 billion in November.

There was a sudden spike in banks tapping into the bailout program during the first week of the month with financial institutions borrowing $3.87 billion from the Bank Term Funding Program (BTFP). There was another surge in borrowing between Nov. 15 and Nov. 22, according to Fed data.

As of Nov. 22, there was $114.1 billion in outstanding loans in the BTFP bank bailout program.


ZeroHedge also observes, “Big banks such as PNC Bank and JPMorgan Chase have filed to close several branch offices in multiple states amid a troubling pattern of rising branch shutdowns in recent years.

Between Nov. 12 and 18, several banks filed to close branch locations, with PNC Bank with the most filings, according to data from the U.S. Office of the Comptroller of the Currency. Pittsburgh-based PNC Bank filed for 19 branch closures—five in Pennsylvania, four in Illinois, three in Texas, two each in Alabama and New Jersey, and one each in Indiana, Ohio, and Florida.

JPMorgan Chase followed closely with 18 filings—three in Ohio, two each in Connecticut and South Carolina, and one each in 11 states, including New York, Illinois, Florida, and Massachusetts.”


8:10 am

Good Morning!

Please note:  I am going in for eye surgery tomorrow and may not be able to see well enough to write this blog for at least a few days.  Please be patient.  I will return as soon as possible.

NDX has made its high on Wednesday, day 254 of the Master Cycle which averages 258 days in length.  Today is day 259, suggesting time is running out for this Cycle.  This morning NDX futures declined to 15896.80 before a bounce.  Overhead resistance is at 16200.00, then 16590.00.  The 2021 all-time high is 16764.86.  The Cycles Model suggests that NDX neither has the time nor the energy to make a new all-time high.  An aggressive short may be made beneath 15738.00.

Today’s options chain shows Maximum investor pain at 16000.00.  Long gamma may begin at 16050.00, while short gamma may begin at 15950.00.

ZeroHedge remarks, “There was a notable divergence below the market’s otherwise silky smooth surface last week.

While the broader market rally accelerated for the 4th consecutive week from the October lows, sending various indexes anywhere between 9% and 13 % higher in the past 4 weeks…

… and the S&P just shy of 2023 highs and less than 5% from its Jan 2022 all time highs, even though interestingly enough, tech actually underperformed last week as we pointed out in our week wrap.”



SPX futures made a low at 4542.20 this morning before a bounce bringing it back to neutral.  Todays is day 259 of the Master Cycle which may be complete or nearly so.  Overhead resistance is at 4600.00.  An aggressive sell signal lies at 4500.00.

Today’s options chain shows Max Pain at 4550.00.  Long gamma begins at 4560.00 while short gamma starts at 4535.00.

ZeroHedge reports, “US equity futures and global markets are in the red, amid a broader risk-off tone to start the week as a renewed slowdown in China’s industrial profits growth dented sentiment in global financial markets, as they were seen as a sign of weak domestic demand and a reminder of the country’s economic slowdown. As of 7:35am, S&P and Nasdaq futures were both down 0.1%, off the worst levels of the session. 10-year TSY yields climbed as much as five basis points to 4.51%, the highest in more than a week, before reversing the entire move; gold climbed to the highest since May, rising over $2,100 while the dollar was little changed and bitcoin slumped under $37,000. Oil was down a fourth day before this week’s delayed OPEC+ meeting. Retail Sales numbers for Black Friday showing +2.5% YoY gain with online sales +7.5% to a record $9.8bn; this could be driven by discount/bargain hunting. Today we will get the October new home sales data, with economists expecting a decline after September’s surprise surge in sales volumes as higher mortgage rates and increased inventories of existing homes weigh on sales. The Dallas Fed manufacturing activity index is also due later for November.”



VIX futures are hovering near Friday’s low, which May have concluded the current Master Cycle.  Should the new Master Cycle begin, it may last until mid-January.  Historical comparisons are misleading and dangerous to your wealth.

Wednesday’s options chain shows Max Pain at 14.50.  Short gamma reigns between 12.50 and 14.00.  Long gamma begins at 15.00 and extends to 27.00.

ZeroHedge remarks, “he VIX made its cycle lows last week, despite elevated cross-asset volatility and poor fundamentals in credit markets that would normally be consistent with a higher VIX.

The index made a new pandemic-era low last Friday, steepening the VIX futures curve.

The VXV (made up of options with an average expiry of three months) and the VIX1D (made of zero-day options) also both made new lows.

Moreover, the VIX is low versus realized volatility and, shown in the top panel of the chart below, historically low versus cross-asset volatility (i.e. fixed-income and FX volatility).”


TNX is retesting its trendline after rising above it on Friday.  This may be the beginning of a new Master Cycle that may rise into the end of the year.  Unfortunately,  the prevalent discussion is when the Fed may start cutting rates, not  a resumption of rising rates.


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November 22, 2023

8:10 am

Good Morning!

NDX futures rose to 16011.00 this morning as the index continues to consolidate beneath Monday’s high at 16056.76.  Yesterday’s action may have caused an island reversal, leaving a gap between Tuesday’s open at 15951.00 and Monday’s close at 16027.06.  Should the gap be filled, the NDX may go higher.  However, today is day 254 in the Master Cycle, so time is running out.  In addition we have Thanksgiving holiday on Thursday and a half-day market on Friday.  Today may tell us whether the rally is over or not.

Today’s options chain shows fierce competition between longs and shorts between 15925.00 and 15950.00.  Long gamma starts at 16000.00 while short gamma begins at 15900.00.

ZeroHedge observes, “They are long up here

Non dealers US equity futures positioning is rather long again. We have seen slightly longer positioning, but the brutal move since the crowd was short has been extreme.”



SPX futures have climbed to 4553.10 thus far this morning.  Dealers and institutions are attempting to re-ignite the rally going into Thanksgiving.  Remember, institutions start the market day, then sit back and observe what retail investors do with their “signals.”  The final outcome is the close, where all the activity is netted out.  Today is day 254 in the Master Cycle.  Time is starting to run out for the bulls.  One may consider an aggressive short position beneath 4500.00.

Today’s options chain shows Max Pain at 4525.00.  Long gamma starts at 4550.00 while short gamma rears its head at 4520.00 and becomes very persistent beneath 4500.00.

ZeroHedge reports, “Futures reversed earlier losses and traded at session highs as bond yields slid to two-month lows and oil tumbled after Bloomberg reported that the OPEC+  meeting scheduled for this weekend could be delayed amid Saudi dissatisfaction with member production levels. As of 7:40am ET, S&P futures rose 0.24%, trading at 4,562 and Nasdaq futures gained 0.4% as Wall Street headed for one of the best November rallies on record. Nvidia pared a decline in pre-market trading after investors initially reacted coolly to its latest quarterly report; the stock traded in a 6% range last night when its Q4 guidance was in the middle of the whisper range. Microsoft gained about 0.7% as Sam Altman returned to OpenAI after days of drama. The decision to restore him to the world’s best-known artificial intelligence startup marks a victory for biggest backer Microsoft, which worked with fellow investors to reverse Altman’s firing. Treasury yields dipped to two-month lows at 4.37%, while the USD rebounded from its weakest level in almost three months; commodities are under pressure ex-metals; gold remained just over $2000 as bitcoin recovered some of its overnight losses that dragged it below 35,000 following news of the Binance/CZ fine and settlement. News of a temporary halt in fighting between Israel and Hamas failed to ignite broader risk-on sentiment, with investors instead looking to data including mortgage apps, jobless claims, durable- and capital-goods orders and consumer sentiment, for clues on the direction of monetary policy.  ”



VIX futures sank to a new low at 12.96 this morning.  Today is also day 254 in the Master Cycle.  Since VIX trades in smaller volumes, it can be easily manipulated.  However, that does not extend beyond the end of the Cycle, which is upon us.

Today’s options chain shows Max Pain at 13.00-13.50.  The shorts have an advantage at 13.50, but there is no follow-through.  Long gamma starts at 16.00 and extends to 30.00.

ZeroHedge comments, “Record gamma. Record boring

1. GS has dealers long $7.1bn of SPX gamma at spot, the second highest reading since 2022.

2. The cash equity desk at GS says they were 2 on 1 –10 scale in terms of overall activity levels

3. Another slow day on the derivatives side as 28.96mm total options traded, the 3rd lowest volume YTD (42.63mm avg)”



TNX sank to a new low at 43.65 this morning.  However, it bounced immediately back to the trendline.  Today is day 251 in the current Master Cycle.  The Cycle normally may have a week to resolve.  However, TNX is putting on the finishing touches to an ending diagonal, signaling the end to this decline.  Those expecting rate cuts may be mightily surprised.

ZeroHedge remarks, “Since the last FOMC meeting, on November 1st, the dollar has tumbled over 3% sending stocks, bonds, and bitcoin all higher (and gold, though only marginally)…

Source: Bloomberg

Rate-change expectations have shifted significantly more dovish with more rate-cuts priced-in sooner in 2024 (with nearly 100bps of cuts priced-in for next year)…”



USD futures consolidated this morning, after rising above the Moving Average at 103.43.  This puts the USD back on a buy signal.  This may be a signal to bonds and equities that all is not well.  Money flows are paramount in determining the market direction.  Although some of these flows may be coming from foreign locations, the rising USD may indicate weakness in the markets.


Crude oil declined to 74.08 after being repelled by the mid-Cycle resistance at 78.21.  The decline may continue to early December.  The target for this decline may be the Cycle bottom at 66.21.  More serious trouble may develop should it cross beneath the March low at 63.57.

ZeroHedge remarks, “Oil prices are lower this morning as the usual malarkey of leaks, rumors, and denials dominates price action ahead of the planned OPEC+ meeting this weekend.

The selling started with a report by Bloomberg claiming that the Saudis expressed dissatisfaction with other members about their oil production levels.

The worry, Bloomberg claims, is that Riyadh might reverse its unilateral 1 million barrel-a-day curb if its counterparts don’t contribute further to the supply reductions.

That sent prices lower.”


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