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.

11:15 am

While stocks and bonds go into decline, foodstuffs may be on the rise.  The GSCI Ag Index is about to hit its Master Cycle low this week.  The Cycles Model suggests that food costs may rally to the end of March!  This is one sector to be long as a hedge against rising food costs.

USAToday comments, “Jesi Aviles knows exactly what her weekly grocery bill will be before she walks into Walmart.

“I know when I go in the grocery store, I’m not leaving without spending $400.”

The 32-year-old stay-at-home mom of five in Mount Airy, North Carolina, has watched that number climb steadily over the past few years.  Just about two years ago, she could feed her family of seven for $200 a week easily.  Now the cost has doubled. The family spends about $1,600 on groceries a month, more than their $850 rent.”

10:43 am

BKX has pulled back from its Cycle Top resistance and reversed beneath its upper trendline, giving an aggressive sell signal.  BKX has lasted beyond the mainstream stock highs due to investor rotation out of AI and retail stocks.  This creates a false sense that all is well in this category.  One cannot be further from the truth, as rising rates and rising Yen have taken away the free pass to profits in the financial.  While TNX is testing the 42.00 level, the Bank of Japan may come out with its revised Statement of Monetary Policy on Friday.

8:10 am

Good Morning!

SPX futures fell to 6770.50 overnight, coming near the 52-day Moving Average, but managed to crawl back up to the flat line this morning.  An appearance of normalcy on the surface hides the churning beneath.  Rotation out of AI and retail stocks has been finding a home among small-cap and mid-cap stocks, a risky bet.  November’s delayed employment report is due at 8:30 am.  The consensus is for a negative surprise.  The Short-term outlook is for a brief bounce this morning back to yesterday’s high at 6861.59.  The minimum decline after the bounce may be to the 52-day Moving Average at 6762.00.  However, a negative surprise may decline through that level.  The Head & Shoulders neckline is at 6522.00.

Today’s options chain shows Max Pain at 6820.00.  Long gamma begins above 6850.00 while short gamma rules beneath 6780.0.

ZeroHedge reports, “Stock futures are lower, but well off session lows, as traders await delayed jobs data that will shape the Fed’s next move. As of 7:15am, S&P 500 futures are 0.2% lower while Nasdaq 100 contracts are -0.3% with all Mag 7 names lower premarket; European equities are little changed.”

9:40 am

ZeroHedge observes, “Ahead of today’s jobs report, Goldman Delta One Head Rich Privorotsky wrote that with the October print backward looking and mostly govt related and irrelevant, “anywhere near consensus for November (+/-25k of 50k) feels like the sweet spot…that said, hard to see the FOMC feeling compelled to halt accommodation or even talk about hiking if labor momentum is still sub-100k on trend.”

VIX futures retested this week’s high but remained inside the trading range.  The Cycles Model infers the next two days may offer a strong (breakout) day, waking up the “somnolent” VIX.  The following week may offer higher than usual volatility as the VIX plays catch-up.

Tomorrow’s VIX options chain shows Max Pain at 19.50.  Short gamma rules beneath 19.00 while long gamma may be gaining strength above 20.00.  A nudge above 20.00 may send the VIX into orbit.

The Shanghai Composite has declined to the neckline of the Head & Shoulders formation at 3916.58 today, triggering that formation, with knock-on consequences.  The November 14 high was not its all-time high, which occurred in 2008.  Because it has made a later high, it has attracted many US investors chasing outsize gains.  Those gains may soon be losses.

TNX ramped up to the Head & Shoulders neckline at 42.04 this morning, testing that resistance.  It may have made a double directional signal last week, signifying the potential Master Cycle low.  A breakout may be imminent, signaling a possible rally for yet another month.  A move in either direction may do so in strength.

USD may have made its extended Master Cycle low at 97.90 this morning.  A reversal may signal a very strong uptick in the USD through the end of the year.

The Japanese Yen broke above Intermediate resistance at 65.45, confirming its buy signal.  The Cycles Model suggests the uptrend may continue to early January in increasing strength.  The 52-day Moving Average is at 64.98 above which the trend is commonly recognized.  The rising strength of the rally may be supported by short covering.  In essence, the Yen carry trade is a big short on the Yen.

Bitcoin is continuing its descent towards the Head & Shoulders target.  The Cycles Model shows at least another week of decline.  There is an option of declining to the year-end.  We may monitor bitcoin to see where & when the end finally comes.

West Texas crude declined to 54.97 this morning,  beneath the Head & Shoulders neckline at 56.30 and the Cycle Bottom at 55.59.  The final decline may be underway and may be over in the next two weeks.  This is rare positioning for such a formation, so it may bear monitoring.

ZeroHedge observes, “West Texas Intermediate oil fell below $55 a barrel for the first time since February 2021, the latest sign that crude supplies are outpacing demand as the market braces for a large surplus, and further helped rising hopes for a potential peace deal in the Russia-Ukraine conflict.’

The Lord’s Prayer

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

10:42 am

SPX has declined beneath the short-term trendline at 6827, which held it up until late last week.  The aggressive sell signal is on, but closing in on additional confirmation beneath Intermediate support at 6789.31.  The 52-day Moving average is near 6766.00, where most investors may recognize the sell signal.

7:50 am

God Morning!

SPX futures rose to 6864.10, a near perfect Fibonacci 61.8% retracement after a 102 point decline from Thursday’s high at 6903.46.  Contrary to some reports, the SPX did not make a new all-time high, as the   October 29 high at 6920.34 remains the record high, based on the futures, cash market and SPY, whose high on that date was 689.70.   Perhaps there is a bit of wishful thinking about the Santa Rally, while not a bust, came awfully close to making that ATH.  What caused the failure may have been a loss of confidence in AI and consumer discretionary stocks.  The rotation to small and mid-caps was not enough to push the major indices higher.  The Cycles Model indicates that Thursday may have been the Master Cycle high for the SPX.  This allows the potential of a decline to the end of January.  Should that be accurate, the next step may be a decline to test the Head & Shoulders neckline at 6520.00.

Today’s options chain shows Max Pain at 6850.00.  Long gamma may begin above 6890.00 while short gamma resides beneath 6825.00.

ZeroHedge reports, “Stocks are set to recoup some of Friday’s tech-driven losses, with a big week of data releases ahead, as the last full week of 2025 comes witgh a bang. Still, sentiment seems a little shaky, with rising signs of skepticism over AI and debate about the extent of rate cuts next year.”

VIX futures rose to 16.52 above the trendline at 16.30.  This may indicate an aggressive buy signal.  Confirmation may come above the 52-day Moving Average at 18.37.  While ;the average investor ignores the VIX until a breakout at 28.27, professionals are loading up on the VIX as a hedge against an increasingly uncertain market.  The Cycles Model suggests a potentially explosive move out of Friday’s (proposed) Master Cycle low.

The December 17 options chain shows Max Pain at 19.50.  Short gamma rules b etween 14.00 and 19.00.  Long gamma begins in strength at 20.00 and reveals institutional presence with large clusters of calls every 5 points to 110.00.

TNX retreated this morning after retesting the 42.00 level on Friday.  The top view shows the Cycles Model suggesting that the 10-year yield may be flat or lower this week, possibly targeting the 52-day Moving Average at 40.02, followed by a potentially explosive move higher.  Once the retracement is complete, a breakout to a mid-January high near the Cycle Top may be anticipated.

USD futures may be slowly rising out of their Master Cycle low on Thursday.  The Cycles Model shows noticeable activity in the USD starting later this week, with a possible breakout this weekend followed by a sharp rally to the first week of January.

The Japanese Yen rose above its Intermediate support at 64.48, amplifying its buy signal.  The rise in the 10-0year Japanese bond rate in late October signaled the end of rising AI stock prices which are dependent on longer-term financing (charts not available) for their data centers.  A breakout above the 52-day Moving Average at 65.05 may signal the end of the Yen carry trade.  The Bank of Japan will issue a new statement on monetary policy on December 19.  The Cycles MOdel suggests this may cause a great amount of volatility in the Yen.

Bitcoin appears to be sliding down the Cycle Bottom at 89087.00.  Bitcoin may “fall off the luge” later this week as the decline accelerates.  While the normal Cycle bottom may be scheduled to occur within the next two weeks, the decline may continue with strength to the end of the year.

Gold futures may have made a secondary high on Friday at 4384.15.  The problem is, the all-time futures high was 4398.00 on October 20.  Note that TNX made its low on October 22 and has been trending higher since.  The USD made its low on September 17.  These events have kept gold in a corrective formation with a possible lower low in January before trending higher.    Commentators are confident that the bull market in gold may last another year.

Silver futures may have made a new all-time high on Thursday while completing a probable Master Cycle high.  However, there may be room for yet another new high this week.  The decline on Friday after making its high has  been retraced to 64.18 this weekend.  Retracements of this nature may be strong enough to make investors to believe that it will go higher, but may turn into a false flag.  The real parabola may not have arrived, yet.

Crude oil futures have declined over the weekend to 56.67, threatening the neckline of the Head & Shoulders formation near 56.50.  Crude has about two weeks to decline beneath the neckline, followed by a snap back to retest the neckline resistance.  The head & Shoulders formation may take two months to complete.

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.

The Feast of Our Lady of Guadalupe

11:04 am

SPX has declined beneath the December trendline at 6827.00, creating a potential aggressive sell signal.  An aggressive signal comes with possible bounces back above the trendline, but is more likely than not to be a valid signal.  The signal may be confirmed beneath Intermediate support at 6791.13 with additional confirmation beneath the 52-day Moving Average at 6763.82.   Take appropriate action.

ZeroHedge remarks, “The fecal matter was already starting ti strike the rotating object following Broadcom’s disappointing results last night, but the bottom just dropped out of stocks  (and crypto) as the following headline hit the Bloomberg screens:

• *SOME ORACLE DATA CENTERS FOR OPENAI DELAYED TO 2028 FROM 2027″

9:30 am

Good Morning!

SPX futures rose to 6911.80 this morning, making a new retracement high, but not a new ATH.  The cash market high remains at 6903.46. The main view of this action is that the SPX may very soon break down to challenge the neckline of the Head and Shoulder formation at 6521.92.  Crossing beneath the neckline may lead to a further decline to the 1987 trendline near 6000.00.  The alternate view is that a new all-time-high may be made within the week, negating the Head & Shoulders formation, followed by a major reversal in the following week.  The Cycles Model suggests a possible triple panic threat emerging next week with a potential of follow-through during January.  An aggressive sell signal may be given beneath 6827.00.

Today’s options chain shows Max Pain at 6875.00.  Long gamma may strengthen above 6880.00 while short gamma resides beneath 6850.00.

ZeroHedge reports, “US equity futures are mixed; with small caps higher and tech stocks lagging. As of 8:15am ET, S&P 500 futures fall 0.1% after hitting a fresh record high yesterday; Nasdaq 100 contracts -0.5% amid signs of rotation out of tech as the equity rally broadens…”

VIX came off its possible Master Cycle low this morning, but has not crossed above the first resistance at the trendline, near 16.30.  Should the VIX complete a reversal. the new Master Cycle may last until the end of January.

The December 17 options chain shows Max Pain at 19.50.  Short gamma resides between 14.00 and 19.00.  Long gamma becomes strong above 20.00 and shows institutional presence every 5 points up to 100.00.

10-year Treasury bond yields rose to 42.01, just short of a breakout this morning.  The Cycles Model may give TNX the opportunity of a spike rally this next week to finish off the current Master Cycle.  Should TNX make a deeper retracement low, the alternate view is to reach the Cycle Top at 45.50 by mid-January.

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 declined overnight to 6811.30, then bounced to 6869.00, making an exact 61.8% Fibonacci retracement.  Should SPX reverse down, it will have given us an aggressive sell signal.  Aggressive sell signals are fraught with blow-backs and rising volatility.  However, once the decline is underway, the next potential support level may be the 52-day Moving Average at 6752.70.  There is a strong likelihood that the decline may completely retrace the rally from November 21 before a significant bounce occurs.  The Cycles Model suggests today may be a high volatility day, with the potential for a panic decline.

Today’s options chain shows Max Pain at 6880.00.  Long gamma resides above 6900.00 while short gamma prevails beneath 6850.00.  Should the SPX repeat the overnight futures session, short gamma may affect trading today.

ZeroHedge reports, “US equity futures are lower, as lousy earnings and an ugly capex forecast by Oracle reversed the market euphoria following the “more dovish than expected” Fed rate cut.”

VIX futures rose to 16.88 and declined back beneath the trendline near 16.40.  The Cycles Model suggests a breakout to new highs in the VIX may be imminent.  VIX can go from very sleepy lows to dynamic highs in very short periods of time, as seen in April.  A repeat performance may be in the making.

The December 17 (monthly expiration) options chain shows Max Pain at 19.50.  Short gamma runs strong between 14.00 and 19.00.  Long gamma Starts at 20.00 and runs to 100.00, thanks to institutional participation.  This could be an interesting op-ex.

US 10-year bond yields plummeted to 41.23 during the overnight session, finding possible support at the trendline near 41.25.  It opened at 41.31, suggesting a bounce/reversal may have begun.  The Cycles Model infers a super-abundant strength over the next several days, implying a breakout that may end at the Cycle Top at 45.50 in the near future.  The ensuing rally may prove once and for all that the Fed does not control rates.

ZeroHedge observes, “Tl;dr: The FOMC cut rates by 25bps to 3.50-3.75% as expected, with a 9-3 vote split; Miran sought a 50bps cut, while Goolsbee and Schmid preferred no change.”

ZeroHedge opines, “Rate Cuts Are Priced In—Forward Guidance Is the Catalyst

• Recent hiring data points to a weakening labor market.

• The Fed will start reinvesting more in Treasurys.

• The 2026 voting makeup will likely favor more easing.

The Federal Reserve’s monetary policy path should remain dovish…”

USD is in the process of making a Master Cycle low today near the current low of 98.37.  A reversal above the 52-day MovingAverage at 98.99 offers a buy signal for USD>  The Cycles Model implies that USD may have a very strong breakout above all the support/resistance lines as early as tomorrow.  The new Master Cycle may last to the first week of January.

Bitcoin has declined beneath the Cycle Bottom support at 90245.00, making a morning low at 89429.88.  The Current Master Cycle has about two more weeks of decline ahead.  Note the Head & Shoulders target appears to be deeper than the April 7 low.  This poses serious consequences for international liquidity.

Silver futures rose to 63.25 during the overnight session, continuing its course toward the upper trendline near 65.00.  The Cycles Model shows today as a particularly strong trading day.   It may “throw-over” as the momentum carries it higher over the next week.  The current Master Cycle may end abruptly, so caution is urged.

Gold futures remain within their two week trading range.  However, a breakout may be imminent as the Master Cycle winds up in the next week or so near 4500.00.

Crude oil futures made a morning low at 57.0, very near the Head & Shoulders neckline.  Should it cross beneath it, the formation may be triggered with serious knock-on consequences.  The Cycles Model allows about two more weeks of potential decline, giving it plenty of time to make its 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.

8:00 am

Good Morning!

SPX futures declined to 6826.50, challenging the demarcation that may announce the resumption of the larger decline.  Should that be so, the next  level that may produce a bounce may be the 52-day Moving Average at 6754.77.   The Cycles Model infers increasing volatility today with a possible panic decline tomorrow.  The Head & Shoulders formation, once activated, defines the potential minimum decline.  Additionally, Ending Diagonal patterns are often retraced to their origins, indicating a potential decline to the April 7 low at 4835.00, a potential 30% decline from the all-time high.

Today’s options chain shows Max Pai at 6855.00.  Long gamma may begin above 6860.00.  Short gamma appears beneath 6825.00.

ZeroHedge reports, “US equity futures are flat ahead of a Fed meeting where a rate cut is assured (the only question is whether it will be hawkish or dovish) and Oracle results later.”

VIX futures rose to 17.57, above the trendline near 16.50.  It is on an aggressive buy signal, where the riskiest, but most lucrative positions may be made.  To the average investor, VIX appears to be very sleepy.  The buy signal is confirmed above the 52-day Moving Average at 18.40, where most professional hedging begins.  The average investors may wait for a breakout above 28.27 before stepping over to buy protection.  A potential target for a bullish move may be the April 7 high, at 60.13.  A more likely target may be the August 2024 high at 65.73.

Today is options expiration for the VIX, so many positions are closing out.  The December 17 (monthly) options chain shows  Max Pain at 19.50.  Short gamma has the majority beneath 19.00.  Long gamma picks up above 20.00.  The majority of options investors are short.  Ms. Market often proves the majority wrong.

The 10-year Treasury Bond yield futures rose to 42.12, while the cash market elevated to 42.04.  This may form a neckline of a Head & Shoulders formation with a minimum target at 44.51.  Note the Cycle Top resistance is at 45.50.  There may be a pullback earlier today before proceeding to break through the neckline.  However, bond volatility is starting to move higher.  The Cycles Model offers a triple whammy of strength over the next two weeks that may become chaotic.  A hawkish rate cut suggests there may be no further cuts for the next three FOMC meetings in 2026, after which Powell steps down.  Investors seem to be anchored to the notion of three mid-Cycle rate cuts, signifying a potential loss of confidence.

USD futures are creeping higher, along the 52-day Moving Average at 99.15 and has moved above the mid-Cycle support at 99.01.  A clear buy signal may be offered above the 200-day and Intermediate resistance at 99.49.  The Cycles Model suggests a powerful move higher in the making, with extra strength beginning this weekend.  The USD may continue its upward path through the first week of January.

Bitcoin has moved beneath Intermediate resistance at 92997.00, creating a potential sell signal.  Its retracement high at 94617.00 was brief and vexatious, as a sell signal had been previously given.  However, volume has dropped off considerably, suggesting that confidence was waning.

While gold continues to plod along beneath its Cycle Top resistance, silver futures have gone parabolic.  This morning’s high is 62.13, suggesting the potential target at 65.00 may be met or exceeded.  There is an approximate week left in this Cycle.  Many speculators may attempt to go long, to their ultimate dismay, as silver may pull back as much as 50%.

ZeroHedge opines, “The Silver Slingshot

For the last 18 months, the Gold-Silver Ratio (GSR) has been the “widow-maker” for precious metals bulls. It has tested the patience of anyone paying attention to hard assets. While gold spent late 2024 and early 2025 shattering records and grabbing headlines, silver—the bipolar cousin that is half monetary metal, half industrial commodity—lagged behind.”

The Japanese Yen slid beneath the Cycle Bottom support at 63.99.  The perceived weakness may not last, as the yen is due for a shot of strength by the weekend.  The BOJ may make its statement on monetary policy on December 19.  The Cycles Model suggests turmoil may result through the first week of January following that statement.

West Texas Crude oil declined to 57.66 this morning.  The neckline of a Head & Shoulders formation resides near the Cycle Bottom at 56.88.  Should the decline go beneath it, the Head & Shoulders formation may be activated.  The Cycles Model suggests the decline may continue through the end of the year.

The Lord’s Prayer

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

10:00 am

Good Morning!

SPX is challenging a minor trendline near 6850.00 this morning as it attempts a retracement bounce.  Once complete, it may decline to new lows beneath 6827.00, where an aggressive sell signal resides.  Aggressive sell signals often appear where the likelihood of a further decline may be 50% or more.  The next support is the Intermediate level at 6784.14, where the probabilities may exceed 70%.  The most commonly recognized support area is the 50-day (52-day) where the probability of a further decline may be 90% or more. While the November 7 low briefly went beneath the 52-day, it is considered a bounce off the 52-day.  Trendlines are important.  Friday’s high tested the 7-month trendline, while today’s retracement is testing a much smaller trendline, an extension of the Triangle formation.  Once beneath it, the decline is likely to resume.  Yesterday’s decline was highly unusual, considering this is a FOMC week.  The powers-that-be usually attempt to signal that “all is well” prior to a Fed announcement with a flat or rising market.  The break of the trendline, however small, may set the tone the the market reaction after the FOMC announcement.  The Cycles Model infers that there may be a panic reaction to the Fed on Thursday.

Today’s options chain shows Max Pain (minimal payout to options holders) at 6850.00.  Long gamma strengthens above 6870.00 while short gamma becomes dominant beneath 6840.00.  The downside fuse is short.

Zerohedge reports, “US futures are unchanged, with traders looking forward to two market-moving events on Wednesday: the Fed meeting (where 22bps of easing is priced in) and Oracle results. ”

VIX rose to a morning high at 17.20 and has settled back to its own trendline near 16.60 – 16.70.  It is on an aggressive buy signal with further resistance at the 52-day Moving Average at 18.39.    Smart money are taking their positions while the average investor waits for a rise above 25.00 or a breakout.  The Cycles Model allows two more weeks to rally with some panic days involved.

The December 10 options chain shows Max Pain at 17..00.  Short gamma dwells between 15.00 – 16.00.  Long gamma arises above 18.00, but concentrates under 25.00.  No one is expecting a blow-out move.

TNX may be regaining its upward momentum as the bond market may be about to remind the Fed that it cannot be toyed with.  It broke out above its trendline yesterday and may be approaching the mid-Cycle resistance at 42.45 (very near the 200-day Moving Average).  The Cycles Model suggests possibly three panic days (rallies) in the 10-year note over the next two weeks.  In the past, the Fed has consistently followed the direction that the bond market has given them.  Any attempt to do otherwise may lead to a disruption of major magnitude.

Bitcoin is attempting to exceed last Thursday’s high at 94089.00.  However, it is meeting resistance at the Intermediate demarcation.  Should it fail to go higher, the decline may resume to the Head & Shoulders target in the next several weeks.

Crude oil futures hit a new low at 58.03 this morning, beneath Intermediate support/resistance at 59.64 and the 52-day Moving Average at 60.04.  It is on a confirmed sell signal.  The Cycles Model suggests a further decline to the end of the month with a possible Fibonacci target near 52.00.  It may go lower, possibly as low as 44.00.

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.

2:07 pm

SPX has declined to short-term support at 6827.00, but not through it.  It has already crossed a short-term trendline, signifying weakness.  Beneath 6827.00 lies an aggressive sell signal. Investors should consider lightening up their longs, should SPX decline further.

RealInvestmentAdvice considers, “A recent article by Simon White, via Bloomberg, discussed the rising cost of margin debt for investors. While his analysis below compares the cost of debt to GDP, we will also consider a more critical comparison to disposable personal income (DPI).”

7:45 am

Good Morning!

SPX futures rose to 6885.00 over the weekend, then eased down to test Friday’s low.   The next two days contain a pivot, indicating a potential intra-Cycle reversal.  The next opportunity for a pivot may be near mid-day.  Currently the trendline offering overhead resistance is approaching 6900.00.  Should the SPX trend lower, an aggressive sell signal may be offered beneath 6825.00.   Intermediate support lies at 6773.98.  A decline beneath that support offers confirmation of the sell signal.  The Cycles Model remains relatively calm until Thursday, suggesting a downside panic may develop after the FOMC news release.  The expectation is that Powell may announce another rate cut, saving the Santa rally.

Today’s options chain shows Max Pain at 6870.00.  Long gamma rules above 6885.00 while short gamma becomes strong beneath 6850.00.

ZeroHedge reports, “With just 17 trading sessions left in 2025, stock futures edge higher again and are on pace for 10 gains in the past 11 days. S&P 500 futures were up 0.2% as of 5:32 a.m. in New York, with Nasdaq 100 contracts +0.3%.”

VIX futures rose to a weekend high at 16.39, testing the trendline.  While the crushing of the VIX appears to be complete, the magnitude of the decline signals a possible payback in the other direction.    A rise above the trendline gives a potential aggressive buy signal for the VIX.  Confirmation of the buy signal comes in above the 52-day Moving Average at 18.38.  The April high may come into play again.

Teh December 10 options chain shows Max Pain at 17.00.  Short gamma has narrowed down to 15.00 – 16.00.  Long gamma begins at 18.00 with max longs at 20.00.

The US 10-year Bond yield rose to a weekend high at 41.63, breaking through the trendline resistance near 41.00.  The breakout is surely to be recognized by the long UST investors.  The Cycles Model suggests a triple panic event occurring over the next two weeks.  The pressure on yields may be immense as bond long run for cover.  This somehow doesn’t jive with the nearly 100% expectation of a Fed cut on Wednesday.  What else is there?  With reserve levels no longer abundant, the Fed is expected to resume funding Reserve Management Purchases and Term Repo Operations to the tune of $45 billion per month stating in January.  Should the market react strongly, it appears that the announcement may be “too little, too late.”

USD appears to be consolidating just above Thursday’s Master Cycle low.  While USD appears to be sleepy, the Cycles Model suggests a very strong wake-up call arriving this week with knock-on effects for the next month.

Bitcoin is striving against the Cycle Bottom resistance at 91042.00 this morning, but is not expected to make a new high against Thursday’s high at 94089.00.  The Cycles Model suggests 2-3 weeks of further decline as the Head & Shoulder target looms.  Bitcoin may be an international proxy for liquidity and may be warning of an upcoming liquidity event.

Gold futures have remained flat for the past week.  However, the Cycles Model suggests a possible panic surge higher in the next two weeks.  Gold remains on a buy signal with a potential target near 4500.00.

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.

7:45 am

Good Morning!

SPX futures reached a morning high at 6877.30, within the target range announced earlier this week.  Should the fractal high imitate its predecessors, it may be complete this morning.  A decline beneath 6810.00 instigates an aggressive sell signal.  The Sell signal may be confirmed beneath Intermediate support at 6774.80 with further confirmation beneath the 52-day Moving Average at 6740.98.  The possibility of a Key Reversal arises with a new high today followed by a decline beneath 6827.00.  Equities are skating on increasingly thin ice, with the Yen and domestic yields rising. The Cycles Model suggests the ice may break at any time.  Markets seem to be holding out until the FOMC announcement on December 10, but things may begin to unravel prior to that event.

Today’s options chain shows Max Pain at 6840.00 – 6845.00.  Long gamma has inserted itself at 6850.00 while short gamma rules beneath 6825.00.

ZeroHedge remarks, “Wall Street’s financial engineers thought they had found yet another way to turn financial markets into casinos.

The gimmick this time is with 3x, 4x, and even 5x leveraged ETFs tied to individual stocks and cryptocurrencies.

But, as RealInvestmentAdvice.com reports, the SEC just ruled against these new proposals, apparently drawing the line at 2x leverage as the rules state.”

ZeroHedge reports, “Stock futures rise as investors look ahead to Friday’s release of the Fed’s preferred inflation gauge, the core PCE, a reading that may help shape next week’s rate outlook as the BOJ charts its own divergent policy course.”

VIX futures declined to 15.55 this morning, setting up a high probability mid-Cycle reversal from a low point near 15.00.  There is a “shadow Cycle” which appears to target today or early next week.  Fractals are self-similar, pointing to a possible outcome similar to the March 22 to April 7 spike.  The Cycles Model anticipates a spike in VIX that may be larger than the one this spring.

The December 10 options chain shows Max Pain at 17.00.  Short gamma has narrowed down to 15.00 – 16.00.  Long gamma now begins at 18.00 and is well populated to 29.00.

The US 10-year Bond yield is moving higher with strength after overcoming the 52-day Moving Average at 40.79, reiterating its buy signal.  While many technicians realize the significance of being above the 52-day, the majority still calculate with a ruler, looking for the imminent breakout above the trendline.  By that time major moves will have begun.

ZeroHedge reports, “First things first, this is September data… so horribly lagged/stale… but, it’s all we have, so let’s dive in.

The Fed’s favorite inflation indicator – Core PCE – rose 0.2% MoM (as expected), which leave it up 2.8% YoY (as expected), slightly lower than August +2.9%…”

Bitcoin has reversed from its corrective high yesterday at 94089.00 and plummeted below 90000.00 before a bounce.  This registers a completion of the “Shadow Cycle”  previously mentioned in the VIX.   Since Bitcoin may be viewed as an international liquidity proxy, it may be warning of an imminent collapse in liquidity world-wide.

USD has tested both the mid-Cycle resistance at 99.11 an d the 52-day Moving Average at 99.15.  A (key) reversal may be at hand as the USD moves out of its Master Cycle low.

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.

3:04 pm

SPX is toying with the idea of a Key Reversal…a decline beneath 6810.00 would do the trick.  In addition, it would offer us an aggressive sell signal.  Further confirmation may come with a decline beneath the 52-day Moving Average at 6740.91.  The ultimate fake-out would be to close flat or slightly higher today, leaving the dirty work to be done in the overnight market.

8:00 am

Good Morning!

SPX futures consolidated beneath yesterday’s late afternoon high at 6862.42.  It did not reach the proposed target at 6875.00 – 6880.00.  This morning’s action may confirm the high or allow a brief probe higher.  The surface of the market remains calm.  However, there are swift undercurrents that may boil over at any time.  Yesterday may have offered the swing high for the current Master Cycle.  The Cycles Model suggests a possible three-week decline may be imminent.

Today’s options chain shows a much contested Max Pain level at 6850.00.  Long gamma may be found above 6900.00 while short gamma is strongest beneath 6800.00.

ZeroHedge reports, “US equity futures rise, trading less than a percent away from a new record high amid signs of a leadership rotation with Big Tech not leading the bounce this time.”

VIX futures are consolidating near yesterday’s low.  It appears sleepy, but may burst into action at any time.  The Cycles Model informs us of the possibility of a surge of strength that may be imminent.  The immediate target may be the April high.  However, a higher target may be implied.

The December 10 options chain shows Max Pain at 18.00.  Short gamma appears to be dwindling from   15.00-17.00.  Long gamma breaks out strongly at 20.00.

TNX broke above the 52-day Moving Average at 42.79 this morning, creating a buy signal (a sell signal for the UST).  While the breakout may remain unrecognized, the trendline lies near 41.30.  The Cycles Model offers today as a day of strength, which may propel it to, or above, the trendline,  That breakout may gain recognition that all is not well for bonds.

USD futures made a new Master Cycle low this morning.  A reversal above the 52-day Moving Average at 99.19 reinforces the existing buy signal.  The 200-day Moving Average is at 99.53, giving extra confirmation of the uptrend.  USD shorts are nervously sitting on a ticking time bomb that may erupt at any time.   The new Master Cycle may take USD higher through the end of the year.

Bitcoin extended the Master Cycle to a new high at 94089.00 before pulling back.  It sits above the Cycle Bottom support at 92195.00.  A drop beneath that level reiterates the sell signal.  The new Master Cycle may be short but strong, as the Head & Shoulders formation has been triggered and must be completed.   Bitcoin is a good indicator of international currency flows.  A person my buy bitcoin in London and sell it in New York.  Bitcoin has been in decline since China outlawed its use.  Now Europe may be on the verge of implementing capital controls, which may put a nail in the coffin for bitcoin.

The Japanese Yen has risen to 64.70 this morning, exceeding its prior high.  It is on a buy signal since early this week.  Crossing above Intermediate resistance at 64.82 and the 52-day Moving average at 65.47 may strengthen the new trend as it may reach its Cycle Top at 70.95 by the end of the year.  Underlying this, the Japanese 10-year bond yield, which topped out near 1.10% in July 2024 is now approaching 2% in a parabolic move.  While the Bank of Japan claims QE, a break above 2% signals QT, which starts draining liquidity as it repatriates back to Japan.  The offshoot is that the Yen has reversed and starting to climb, causing pain in the Yen carry trade in the US.

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

SPX may have completed its final probe higher prior to hitting the trendline, having consumed the time left in this fractal.  It may go modestly higher, but all the requirements for this formation have been met.  A sell signal may be found beneath 6810.00 with confirmation beneath the 52-day Moving Average at 6736.82.

ZeroHedge opines, “The conclusion to yesterday’s Global Daily was that we are still in a systemic metacrisis. True, many market metrics don’t show it – but how many deckchairs told the Titanic’s passengers they were heading for the iceberg? Markets have a vital role, as do chairs, but expecting them to reflect the potential enormity of what’s going on could end up with you being in very cold water.”

7:45 am

Good Morning!

SPX futures ran up to 6850.00 thus far this morning breaking out of a possible triangle formation.  The 2-hour “trading chart” is highlighted this morning to bring the triangle in sharper focus.  Should this be correct, the SPX may have the ability to rise to test the 7-month trendline at 6875.00 – 6880.00.  Triangles usually proceed a final move  in a series ending in a major reversal.

Today’s options chain shows Max Pain at 6830.00.  Long gamma prevails above 6880.00 while short gamma weighs heavily beneath 6800.00.

ZeroHedge reports, “US equity futures are higher again, led by small cap stocks. As of 8:20am ET, S&P futures are up 0.2% (they dropped following a very ugly ADP print at 8:15am), the same as Nasdaq 100 futs…”

VIX futures continue to consolidate between Friday’s low and the 52-day Moving Average at 18.40, showing very little stress.  A buy signal is found above the 52-day.  VIX has stopped its decline over the weekend when the Bank of Japan announced its consideration of higher rates after months of somnolence.  Rising rates in Japanese Government Bonds may have possible knock-on effects on multiple fronts, including the VIX.  Recall the BOJ’s announcement of higher rates in August 2024?  Something similar may be about to happen again, as the BOJ seeks to “normalize” its rates.

Today is options expiration in the VIX.   The December 10 options chain shows Max Pain at 18.00.  Short gamma is shrinking to 15.00 – 17.00.  Long gamma is rising above 19.00, but there is not a lot of long conviction yet.

The 10-Year Treasury yield has challenged Intermediate support at 40.60, but it may not last as it may be gathering strength to break out above the trendline near 41.40.  The Cycles Model shows an imminent return of trending strength that may force deleveraging of multiple markets.  Blame it on the Bank of Japan.  The gap between the JGB 10-year yield and the US 10-year yield is very wide and pressure to close the gap may bring trending strength back to TNX.

USD futures declined to 98.89, probing beneath the 52-day Moving Average at 99.07.  This may be a false signal to traders, since the current Master Cycle may have ended with this show of downside strength.  While dollar shorts may be relaxing at this probe lower, its may be gathering strength for a fiery rally, as the Cycles Model shows trending upside strength during the next three weeks.

Bitcoin just extended its Master Cycle high this morning and subsequently declined beneath its Cycle Bottom support/resistance at 92401.00. This action gives a sell signal as the decline is moving very fast.  The Cycles Model shows the decline resuming to the end of the year.

Gold futures are rising back above the Cycle Top resistance at 4231.00 this morning.  The Cycles Model shows a possible two more weeks left in the current Master Cycle, with the trendline near 4500.00.  A surge to the upper trendline is possible due to heightening international pressures.

The Japanese Yen has risen above its Cycle Bottom at 64.20, giving a buy signal.   The Cycles Model indicates a rally through the end of the year, allowing the Yen the ability to rise to its Cycle Top at 70.94.  This move may wipe out the Yen carry trade, as borrowers were anticipating ultra-low interest payments (.0025%) and a declining Yen.  Hedge funds using the Yen carry to ultra-leverage (50-1oox) their investment may already be feeling the pain.  Mutual funds and ETFs using leverage should be evaluated for their exposure to the Yen carry trade.