7:45 am 2 Chronicles 7:14
“If my people, which are called by my name, shall humble themselves, and pray, and seek face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sins, and will heal their land.”
Good Morning!
NDX futures reached a new retracement high at 20278.40 this morning, approaching its Cycle Top resistance at 20476.65. Achievement of that target is not guaranteed. Today is day 265 of the Master Cycle which is stretched, but not abnormally so. A deep dive into the Cycles Model suggests a reversal may occur this morning. It may be no coincidence that the BEA offers its revised GDP numbers at 10:00. The anticipated BEA’s downward revision of GDP is about to erase a significant amount of the previously reported YTD growth in the economy. This event, coupled with earnings warnings from highly recognized companies may pull the rug out from beneath the equities market.
Today’s options chain shows Max Pain between 19875.00 and 19900.00. Long gamma may begin at 19925.00 while short gamma may reside beneath 19840.00.
SPX futures reached an overnight high at 5771.30. A test of the Cycle Top resistance at 5782.25 is possible. However, the Master Cycle anticipates a probable reversal this morning, having fulfilled both time and price targets. The GDP revision at 10:00 may be the triggering event for a reversal.
Today’s options chain shows Max Pain at 5705.00. Long gamma may begin at 5710.00 while short gamma may lie beneath 5700.00.
ZeroHedge reports, “Global stocks are soaring after China pledged fiscal stimulus even as traders raised their bets on interest-rate cuts by major central banks (the two are contradictory but who cares). Futures on the S&P 500 climbed 0.8% as US-listed China stocks soared and Micron surged in premarket trading after the company reported stronger than expected earnings and guided higher. As of 8:00am ET, Nasdaq 100 futs jumped 1.5% and the Stoxx 600 index in Europe headed for a record close on the back of what is just shy of China’s “whatever it takes” moment. Treasury yields and the dollar edged lower while oil tumbled for a second day on a report from the FT (which is now doing Reuters’ price manipulation for it) according to which Saudi Arabia was reported to be weighing increasing output, and factions in Libya reached a deal that opens the way to the return of some crude production. Gold soared more than 1% to new all time highs as it prices in all the massive fiscal and monetary stimulus that are coming.”
VIX futures have probed to a new retracement low at 14.98,, testing the mid-Cycle support at 14.97 on day 259 of the Master Cycle. This may end 10 months of low-to-low Cycles. It may be time to buy hedges.
The Japanese Yen futures may be challenging Intermediate support/resistance at 69.22 this morning. However, it has a remaining week of decline ahead (in strength). The next target msy be the 50-day Moving Average at 67.93. The final target is likely to be the mid-Cycle support at 66.19. It is now time to exit the Yen carry trade.
TNX is in a pullback after challenging Intermediate resistance at 37.82. Short-term support lies at 37.00, where a resumption of the rally may be found. The possible change in trend is unrecognized by most analysts. However, a rally above the 50-day Moving Average may change their outlook. Note the inverse relationship between the Yen and the TNX.
The Shanghai Composite vaulted to a new corrective high at 3000.65 today after being repelled by the mid-Cycle resistance at 2958.09. There is a week left in the current Master Cycle, which may allow the Shanghai Composite to reach its Cycle Top at 3186.16. Please note that this is a bear market bounce that may fade just as quickly as it emerged.
ZeroHedge observes, “Yesterday, when describing the latest round of monetary stimulus out of Beijing, we said that “China is not done stimulating” and boy were we right.
Global markets are sharply higher (again) on Thursday, fueled by hopes of more intervention just days after the central bank announced the biggest monetary stimulus since the pandemic, after China extended its stimulus barrage for the third day in a row, and vowed even more support including a pledge to intensify fiscal support for the world’s second-largest economy, as well as press speculation of 1 trillion renminbi of bank injections.
- *CHINA WEIGHS INJECTING $142 BILLION OF CAPITAL INTO TOP BANKS
China vowed to save the private economy, stabilize its property sector from further slumping, boost its stock markets and ensure necessary fiscal expenditures, according to the readout from a Politburo meeting on Thursday.”
Crude oil futures plunged beneath the Cycle Bottom support and the Head & Shoulders neckline at 68.75 in the overnight markets. This appears as a triggering event that forecasts a further decline to the Head & Shoulders target listed on the chart. This decline has been a long time in the making and many do not recognize the signs of what may be about to happen. The Cycles Model suggests more than 3 weeks of decline may be ahead.
ZeroHedge comments, “Is there something about $70 WTI that ‘the powers that be’ are afraid of?
Source: Bloomberg
A month ago, Reuters reported, citing the usual anonymous sources, that OPEC+ was set to proceed with a production hike in October. That immediately sent oil prices lower, slamming WTI back below $70. A few days later, Reuters reported the exact opposite – that any October production cuts were likely to be delayed (again citing anonymous sources).”
After seeing the Ag Index flail near the bottom during the month of August, we can now see prices breaking out in a big way. GKX has exceeded its mid-Cycle resistance at 371.93 and is on a confirmed buy signal. Its target may be the Cycle Top at 405.62 since the current Master Cycle may continue through early November.