11:35 am
SPX has declined beneath 5840.00 and beneath its Ending Diagonal trendline. This may be considered an aggressive sell signal. Confirmation may come at short-term support at 5780.34. Past performance is no guarantee of future results.
10:55 am
BKX, our liquidity proxy, has begun its decline after making its Master Cycle high on Thursday. The Cycles Model suggests a month-long decline that may reach the Head & Shoulders neckline at 73.00. it is on an aggressive sell signal with a confirmation beneath the Cycle Top at 119.49. The top five banks made their earnings reports last week. Now we may see the reports from the regional banks, with possible downgrades.
ZeroHedge reports, “After the massive deposit inflows the prior week, US banks saw total deposits plunge in the week-ending 10/09 (latest data released today), down a stunning $69BN (on a seasonally-adjusted basis), erasing the prior two weeks deposit inflows…”
8:00 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!
SPX futures are down this morning, making a low of 5841.10. Friday’s low was 5840.21, so a reversal may not be complete. However, the Cycle inversion may be substantially finished, leaving Thursday’s high at 5878.46 as the all-time high. Should the SPX open beneath 5840.00, the SPX may reveal a truncation within the Wave structure. Otherwise it may rally to 5900.00-5924.00 in a final blow-off. Hedge funds are “all-in” on a Trump win.
Today’s otions chain shows Max Pain at 5860.00. Long gamma may begin above 5900.00 while short gamma may start beneath 5810.00.
ZeroHedge reports, “US stock futures drop to start the week, trading near session lows as investors looked to a busy week of company earnings for further signs on the strength of the economy. Oil climbed and gold touched another record on mounting tensions in the Middle East. As of 8:00am, S&P futures are down 0.3% after the index capped its longest run of weekly gains this year, while futures for the tech-heavy Nasdaq 100 fell 0.5% while Nasdaq futures slide 0.6%, with megacap tech stocks all mostly lower: TSLA -0.7%, AMZN -0.3%, AAPL -0.3% pre-market after last week’s furious rally. 10-year Treasury yields rise five four basis points to 4.13% and the dollar edged higher. Commodities are higher led by oil and base metals after a bigger-than-expected China LPR rate cut announcement. Over the weekend, BA achieved a tentative settlement of the strike; BA is up +3.8% pre-market. This week, the key catalyst will be PMIs on Thursday. On earnings, more than a fifth of the S&P 500 is due to report this week with Tesla Inc., Boeing Co., General Motors Co. and Coca-Cola Co. in the lineup. Approximately 40% of Industrials (including GE, LMT, MMM, BA, UPS, HON, UNP) and 30% of Materials companies will report. In addition, VRT (Wed pre-mkt; focus on data center), IBM and TXN will provide further color on tech and semis. Also keep an eye on DHR (Tue pre-mkt; housing), KO (Wed pre-mkt; consumer trends), TSLA (Wed aft-mkt; first Mag 7 earnings).”
VIX futures have risen to a morning high of 19.19 after testing the 50-day Moving Average at 18.03 on Friday. That action may indicate that a Master Cycle low may have been made on Friday, as well. The VIX has maintained its buy signal, despite the pullback, making a 61.8% Fibonacci retracement. This may be a good time to accumulate shares.
TNX leaped above its declining trend channel, making a new Cycle high. Wednesday’s low at 39.95 was a precise hit on day 258, suggesting TNX may be capable of going much higher. However, the mid-Cycle resistance and 200-day Moving Average lie at 41.63 offering the possibility of a more substantial reversal. Either way, the Cycles Model strongly suggests higher 10-year rates through the end of the year. Investors are very long treasuries after Powell announced the 50 basis point cut in rates at the very bottom of the Cycle.
ZeroHedge observes, “UNNY HOSTIN: Would you have done something differently than President Biden during the past four years?
KAMALA HARRIS: There is not a thing that comes to mind in terms of — and I’ve been a part of most of the decisions that have had impact.
On Friday, the Treasury Department released a report showing the kind of impact Harris is talking about. If nothing else does, it should cost her the election.”
Gold futures made a new all-time high at 2755.30 this morning. It may be in its final thrust as it threw-over its Cycle Top at 2741.89. The Cycles Model anticipates a possible month-long decline post-reversal. Should that be the case, a possible target may be the October 31, 2022 low at 1618.30. Considering that the Cycle is extended and a throw-over has occurred, a move beneath the Cycle Top at 2741.89 should be a signal to “lighten up” long positions (a possible aggressive sell signal). Meanwhile, experts are calling for gold above 3000.00.
ZeroHedge comments, “Catherine Austin Fitts (CAF), Publisher of The Solari Report, financial expert and former Assistant Secretary of Housing (Bush 41 Admin.), gives her take on gold, Kamala, Trump, control, cash, murder and water. ”
The Shanghai Composite Index may have reached its Master Cycle high at 3300.66 today and may have begun its reversal lower. A move beneath the Cycle Top support at 3249.85 may confirm the reversal with a sell signal. Those who went long at this bounce may find that they were attempting to catch falling knives.
Crude oil futures bounced from its Cycle bottom at 68.27, attempting to reach Intermediate resistance at 70.60. Intead, it reached 70.34 before turning back down. Crude now runs the risk of falling beneath the Head & Shoulders neckline at 68.50 and the Cycle Bottom support at 68.27. Should it do so, it may trigger the Head & Shoulders formation with consequent results. The Cycles Model suggests the ensuing decline may run until the end of the year.