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.
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.”
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.
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.”
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.”