8:45 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!
SPX futures made an attempt at a new ATH, but stopped short at 5857.30. The .5% rate cut in September has flooded the market with cash looking for a home. However, smart money knows that it is temporary. The normal Cycle may be inverted, but it is skating on thin ice. A nominal new high near 5900.00 is possible
Today’s options chain shows Max pain at 5825.00. Long gamma may begin at 5835.00 while short gamma lingers beneath 5810.00.
ZeroHedge reports, “US equity futures are flat, reversing modest overnight gains ahead of the next batch of earnings. As of 8:00am ET, S&P futures were flat while Nasdaq 100 futures are up 0.1%; GOOG was the second of the Mag7 to beat earnings, and the stock is +5.4% pre-mkt after beating across the board on strong cloud growth. AMZN, META, MSFT are all trading up at least 1.7% pre-market. Semis are lower with AMD -8.5% and NVDA -80bps. Bond yields are lower as the curve bull steepens ahead of ADP numbers and US Q3 GDP/Price releases. A Bloomberg gauge of the dollar snapped a three-day advance, and the commodity bid returned led by Energy. META and MSFT are the next Mag7 earnings today. Today’s macro US economic data calendar includes October ADP employment change (8:15am), 3Q advance GDP (8:30am) and September pending home sales (10am).”
VIX futures continue to consolidate at a higher level. The Triangle in the VIX may be a continuation formation, but may not be complete without a rogue Wave (E) breaking beneath the lower Triangle trendline in the next few days. This would be a perfect fake-out to bring longs back into equities.
The November 6 options chain shows Max Pain at 19.00 Short gamma lies from 15.00 to 18.00. Long gamma may start above 20.00, but does not have conviction above 23.00.
TNX has pulled back from yesterday’s Cycle Inversion high. It now has two options to complete the correction. The first is to decline to the mid-Cycle support at 41.990 in a flat correction. The alternate is to decline as far as the trendline at 40.50 in a strong push-back in conjunction with the VIX. This sets up a maximum confusion for traders as they try to make sense out of the whip-saw.
The Japanese Yen rose to 65.60 this morning as it emerges from its Master Cycle low at 64.99. A buy signal may be found above mid-Cycle resistance at 66.04. The Cycles Model shows potential strength in the Yen today and again in the first week of November. Those in the Yen carry trade got a 3% bonus by staying in the trade the past three weeks. That may disappear quickly at the turn of the month, beneath critical support at 3286..
The Shanghai Composite fell today to 3244.91, beneath critical support at 3286.28. It is now on a confirmed sell signal. The Cycles Model suggests a decline to early December with a possible target at or beneath the Cycle Bottom at 2700.44. Should it decline beneath it, the Head & Shoulders formation may be triggered, with consequences listed on the chart.
Crude oil futures tested its Head & Shoulders neckline at 68.50, then retreated beneath it this morning. The formation has been triggered, with potential consequences listed on the chart. The Cycles Model implies that the decline may last until the end of December.