December 28, 2023

10:20 am

BKX is still hovering near its December 14 Master Cycle high.  It has been 9 market days since its high.  A sekl signal may be found beneath its Cycle Top at 92.41.  Be alert since a reversal may be imminent.

TheEpochTimes observes, “It has been nine months since the spectacular and sudden collapse of Silicon Valley Bank. After witnessing three of the four largest bank failures in U.S. history in 2023, the attention of the media and the markets has turned elsewhere. Banking crisis? It is as though it never happened. Having fallen by some 40 percent in March, the NASDAQ Bank Index has recovered to within 15 percent of its high from February. In the last few months, nearly all markets have gone on a bull run, including bank stocks. Yet, and despite the relative quiet, the banking sector is not in great shape. Here are some of the reasons why.”

 

8:00 am

Good Morning!

NDX futures have made a new all-time high at 16970.40.  It is nearing 17000.00, a significant round number resistance.  The energy needed to overcome this resistance may be more than this already overbought index can summon.  At the same time the rally structure is complete, or nearly so.  The trendline underlying the rally is at 16850.00, beneath which an aggressive sell signal may lie.  The lie being promoted by Wall Street is that a soft landing may be engineered by the Fed.  Is Goldilocks back?”

Today’s options chain show possible Max Pain at 16880.00.  There is no evidence of short gamma.  Long gamma begins at 16890.00.

ZeroHedge remarks, “Guess that’s why the call it a bull

1. Dow Jones Industrials closed at another all-time high and has traded green in 12 of the last 14 days

2. S&P 500 is on track for its 9th consecutive green week, which would be its longest winning streak in 20 years

3. Mega Cap Tech Stocks continue surging as the Nasdaq 100 hit an all-time high. IUXX is on track for its best year since 1999.”

 

SPX futures reached a high of 4797.10, approaching round number resistance at 4800.00 and the all-time high at 4818.62 made on January 2, 2022.  While the Dow Jones Industrials have made a new all-time high, the Dow Transports and SPX have not.  Dow Theory posits that, unless the SPX and Transports make new all-time highs, this rally remains unconfirmed and subject to a reversal.  Similarly, the Nasdaq Composite Index, a broad-based index, does not confirm the NDX new all-time highs.

The rising trendline and the 1987 trendline both reside near 4750.00.  Should the SPX decline beneath that level, an aggressive sell signal may be made.

Today’s options chain shows Max Pain at 4780.00.  Long gamma starts at 4800.00 while short gamma may begin at 4775.00.

ZeroHedge reports, “The relentless Santa rally can’t stop, won’t stop, and while S&P futures swung between modest gains and losses, Nasdaq 100 index futures edged higher yet again to record-er highs, putting the tech-heavy index on track for its best year since the dotcom bubble burst, as US equities are set to close out 2023 at all-time highs amid optimism the Powell Fed is poised to boost Biden’s re-election campaign by cutting interest rates as soon as March despite sticky inflation, a sturdy labor market with near record low unemployment and an economy which, according to Goldman, is about to ramp up again. As of 7:50am, Nasdaq futures, already at an all time high after soaring a blistering 55% this year, the most since the pre-dot com bubble 1999 – rose another 0.2%, while S&P 500 contracts were little changed after the benchmark edged within just 0.3% of its record high from January 2022. After inexplicably tumbling yesterday, bond yields have reversed some of the sharp move lower, spawned by the relentless slide in the dollar as the market is now convinced the Fed will cut more than 6 times next year to smooth Biden’s reelection. Oil extended losses because of continued CTA selling, while bitcoin reversed yesterday’s gain.”

 

 

VIX futures hovering near yesterday’s low at 12.37.    VIX is in its accumulation phase, an ideal time to buy (aggressively) before a recognizable breakout.

Next Wednesday’s op-rx shows a huge call wall at 11.00 with active call interest to 24.00.

 

USD futures made a new low at 100.31 this morning on day 258 of the Master Cycle.  Today or tomorrow may be the end of the decline of the USD.

ZeroHedge observes “What could the difference of a couple of quarters make to the overall year’s scorecard?

Well, a ton, if you are sitting in the currency markets.

Only a handful of currencies had managed to eke out a gain against the dollar in the first half:”

 

 

 

 

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