12:39 pm
SPX declined beneath the 3-month median at 5770.53 to a low of 5718.18, near the 50-day Moving Average at 5697.95. It has triggered a confirmed sell signal at 5770.00. Should it bounce, there may be a 2-day attempt to take back losses. However, if SPX cannot rebound past the median, then a resumption beneath the 50-day may be in order.
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.”
NDX futures declined this morning to 20154.70, just above the diagonal trendline and Intermediate support at 20040.28. A casual observer would conclude that recently the NDX was making a new all-time high. A closer look, however, tells us otherwise, since the ATH was made on July 11 at 20672.10. In other words, the NDX has been struggling to re-take a high made over 3 months ago! While individual stocks may have made new all-time highs, the big picture shows a loss of strength in the index. So, 20040.00 is the line in the sand. As I have been warning that it is unwise to be long, crossing this line (20040.00) creates a confirmed sell signal.
Today’s options chain shows Max Pain at 20425.00. Long gamma may begin above 20450.00 while short gamma resided beneath 20400.00.
ZeroHedge reports, “Futures fell ahead of the busiest day of the earnings season, dragged down by META and MSFT which are both down about 4% following last night’s earnings releases. As of 8:00am ET S&P futures are down 0.6%, but off session lows; Nasdaq futures retreat about 0.7% after Microsoft and Meta growth outlooks fail to impress investors, with the pair together representing half of the losses in Nasdaq futures. The rest of Mag7 is also lower: AMZN, GOOG, NVDA are all down 1% – 1.4%. AAPL, which had been used as a funding source is -33bps. Bond yields are flat to down 1bps; the USD is flat. Cmdtys are getting hit with the global risk-off tone, but WTI is higher while Brent is lower. The macro data focus today is on ECI, Income/Spending, jobless claims, and the monthly PCE numbers. Mag7 earnings conclude (ex-NVDA which is Nov 20) with AAPL and AMZN.”
This morning the Industrials futures made a new low at 41916.20. In doing so, it also may have triggered a confirmed sell signal beneath Intermediate support at 42320.00 The Dow Jones Industrials have made their all-time high on October 18 at 43325.00. Commentators have been ignoring the DJIA simply because the NDX and SPX had resumed their advances.
Note that the SPX made its ATH on October 17. The SPX sell signal may be confirmed beneath Intermediate support at 5760.76. Thus far, its low was made at 5767.00.
Today’s SPX options chain shows Max Pain near 5820.00. Long gamma may begin above 5835.00 while short gamma lies beneath 5800.00.
VIX futures ramped up to a morning high at 21.85, possibly confirming the Master Cycle low on October 18. The VIX has been making higher lows since the August 5 spike high, establishing its new trend. A breakout above the Cycle Top at 22.75 would be the icing on the cake. Don’t buy the seasonality story. This is a famous meme that has a mixed history.
The November 6 options chain shows Max Pain at 19.00. Short gamma hovers between 15.00 and 18.00. Long gamma becomes established above 20.00 with growing interest at 35.00. An explosion in the VIX may catch the majority of options traders off guard, as there is little hedging.
Yen futures made a new high this morning at 65.94, confirming the Master Cycle low made this Tuesday. The Cycles Model shows trending strength which may assist the Yen’s advance.Those in the Yen carry trade may find themselves falling behind as the advance in the Yen may cause higher repayments of loans originally taken out due to a low interest rate (.10%).
TNX futures rose to 43.10 this morning. Should TNX advance beyond its prior high at 43.39, it may be considered to be in a phase transition, where the fractals overlap higher. The Cycles Model shows a possible explosion of strength beginning over the weekend which may confirm that observation. Lax attitudes about debt and increasing debt levels affect volatility, while major investors become increasingly wary about their investments in sovereign debts. The Cycles Model suggests increasing rates through the end of the year. here are two possible targets indicated. The first is near 5.3%, a likely near-term target. The longer-term (2025) target may be 8.2%.
Zerohedge comments, “Meditations In An Emergency
It’s now less than a week to go until the USA decides who is going to be their next President. The state of the political discourse recalls the ‘dramatic crossroads’ meme, where the respective labels attached to the sunny uplands and the grim castle of doom is a Rorschach test to confirm our political priors.
I’ve chosen my words deliberately to say that the USA will be deciding on their next President – rather than the next ‘leader of the free world’ – because one of the options on the table is a more isolationist approach to trade and foreign policy where the USA may decline to perform the leadership role, instead prodding oftentimes recalcitrant allies into shouldering more of the global security burden.
That could draw the curtain on the ‘Team America World Police’ neocon phase, or even Woodrow Wilson’s “making the world safe for democracy” idyll, if you prefer to cast your view further back. What’s now clear is that the bond market and the DXY is becoming sensitized to the potential implications of another Trump win.”