8:15 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!
US 30 futures rocketed to 43630.50 in the post-election market, making a new all-time high. This is a highly unusual formation which has multiple outcomes due to its complexity. The first of two possibilities suggests a final peak being made this morning with a reversal this afternoon. That leaves a 2-3 week decline into the last week of November. The second potential outcome implies a continued rally until the last week of November. In that case, the final top may be as high as 45000.00. Both scenarios have issues that may be resolved later today.
ZeroHedge remarks, “Trump won in 2016, he also won in 2020 (but it was stolen from him thanks to 20 million “vapor” votes which magically failed to make a re-appearance in 2024), and he just won again in a landslide, not just the electoral but the popular vote as well… and boy are markets rocking!”
SPX futures have risen to 5924.70 in the post-election market. The same scenario as the Industrials occurs in the SPX. Either the surge ends today (between 5900.00-6000.00) or the inversion continues until later this month (above 6000.00). Inversions are unstable, so due care is needed to defend against a sudden outcome.
Today’s options chain shows SPX clearly in long gamma above 5800.00. Short gamma resides beneath 5700.00.
NDX futures have risen to 20630.90 in the post-election market. It has not made a new all-time high. NDX is interest sensitive, so the TNX may have the key to the non-performance in the NDX. This behavior favors a prompt reversal, bringing down the Blue Chips along with the NDX.
VIX futures plummeted to 15.44 this morning, creating a potential Master Cycle low. Last week I had introduced the idea, but withdrew it when the VIX challenged the upper trendline of the Triangle formation. My error was not taking into account the potential move created by the election outcome. Sometimes formations (especially Triangles) take more patience than most people allow. The tail to the Triangle appears complete, or nearly so. Today is day 267 in the current Master Cycle, which doesn’t allow more time for the formation to develop. The VIX may begin its new (upward) Cycle momentarily.
Today’s options chain shows the puts (under 20) have grabbed the brass ring.
TNX futures surged to a morning high at 44.89, then eased back. The Phase Transition is working as explained in prior blogs. The Cycles Model suggests the trend may continue into January. This does not bode well for interest sensitive stocks and home mortgages.
The Japanese Yen has fallen to a morning low of 64.74. It may be making its Master Cycle low today, on day 267. A reversal in the Yen may begin to put pressure on the Yen carry trade. This may eliminate a major source of liquidity.
Gold futures tumbled to 2330.75 this morning, testing the 50-day Moving Average and Diagonal Trendline at 2649.82. It has declined beneath Intermediate support at 2699.54, creating a possible sell signal. Should it break through the 50-day, the Cycles Model suggests a three-week decline that may challenge the mid-Cycle support at 2413.14. A potential series of panic down days threaten to bring gold down even further to its Cycle Bottom at 2033.23.