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!
NDX futures slid to a morning low of 20217.60 thus far. IT lies beneath the two-month Diagonal trendline near 20400.00 and is on an aggressive sell signal. Short-term support lies at 20113.50 where the aggressive sell may be intensified. The sell signal is warranted, since the NDX has not made a new high since July. An aggressive sell signal implies a reduction of long positions.
Q3 earnings are now in high gear. Investors and hedge funds are extremely long (with margin). This is where disappointment may be the greatest and sharp reactions may ensue. The Cycles Model suggests that panic may arise in the next week.
Today’s options chain shows Max Pain at 20375. Long gamma arises above 20400.00while short gmma dwells beneath 20300.00.
SPX futures declined to 5823.1o this morning. It also is on an aggressive sell signal beneath the Diagonal trendline near 5865.00. The next support lies at 5784.00, doubling down the aggressive sell beneath it. The sell signal may be confirmed at Intermediate support at 5702.00. The 50-day Moving Average is near 5650.00, which is universally recognized as a confirmed sell signal.
Today’s options chain shows Max Pain at a highly contested 5850.00. Long gamma lies above 5890.00 while short gamma prevails beneath 5800.00.
ZeroHedge reports, “US futures are lower, extending yesterday’s losses, as treasuries extended their recent rout sending 10Y yields surging briefly above 4.22% before retracing some of the move as traders priced in the growing probability of a red sweep. The Treasury rout has gone global, pushing interest rates across the world higher. As of 8am ET, S&P 500 futures dropped 0.3%, pointing to the first back-to-back decline in about 30 sessions for the gauge. Nasdaq 100 futures underperformed, dropping 0.4%, as tech stocks start to groan against the weight of surging rates; megacap tech all showed declines: TSLA -0.8%, GOOG -0.5%, AMZN -0.5%. The yield on 10-year Treasuries added one basis point to 4.21% after an 11 basis-point surge at the start of the week; the USD is flattish after reversing a modest earlier loss. Commodities are mixed: Oil added 0.5%, base metals are lower, and precious metals are higher: silver rises +1% to $34.5, a new 12 year high. The only macro today are the October Philly Fed and Richmond Fed reports.”
VIX futures rose to 19.40 this morning, breaking above yesterday’s trading range. Friday’s low may have ended the Master Cycle, indicating a possible new trend. The Cycles Model indicates a burst of trending strength beginning today with effects lasting through the end of the month. Commentators are pointing out that investors may be too obsessed with hedging due to the hotly contested election, rising rates and war drums beating in multiple locations. They claim that hedging may be overdone. The Cycles, on the other hand, show a rising trend in the VIX, which may become more evident this week.
TNX rose to a morning high at 41.92 thus far. Today is day 264 in the Master Cycle. The change in directionality of the Cycles may indicate a change in trend. Should the Master Cycle end today, TNX may pull back to the 50-day Moving Average at 38.55 over the next two weeks before moving higher. Be aware that the new rally that follows may last into January.
USD futures are consolidating above the mid-Cycle support at 103.65. We may see a minor Cyclical pullback this week. However, the trend may continue through late November.