3:38 pm
SPX has hit the upper trendline of its trading channel near 6000.00. The top may be complete.
8:30 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 rose to a new all-time high this morning at 5947.20. It has surpassed the Cycle Top resistance at 5915.00 and appears poised to reach the upper trendline of the 3-month trading channel at 6000.00 as it nears the terminus of its current Master Cycle. Today is day 245 in the Master Cycle, leaving less than 2 weeks to complete the uptrend. Should the SPX reverse in that time, an aggressive sell signal may be had beneath the Cycle Top at 5915.00.
Today’s options chain shows Max Pain at 5915.00. Long gamma may begin above 5950.00 while short gamma lies beneath 5885.00.
ZeroHedge reports, “US equity futures extended their post-election gains, as S&P futures traded near session high with both Tech and small caps outperforming as the dollar eased and yields were flat, as traders continued to map out Trump’s return to the White House and what it holds for the Fed’s interest-rate path. As of 8:00am ET, S&P 500 futs traded 0.2% higher after surging in the previous session on bets that the newly elected President will boost corporates through pro-growth policies; Nasdaq futures rose 0.4% after hitting a new all time high on Wednesday; Mag7 names were mixed premarket with semis bid despite NVDA dipping -21bps. An index of the dollar retreated 0.3% following its best day since Sept 2022. Moves in US Treasury yields were muted after Wednesday’s seismic selloff; bond yields are 1-2bps lower as the curve steepens. The commodity complex is mixed with Ags higher, Energy lower, and Base metals outperforming Precious. Today’s macro data focus is on the Fed’s decision (2pm ET) and the BOE (7am ET); both CBs are expected to cut by 25bps.”
VIX futures are lingering near yesterday’s proposed Master Cycle low at 15.44. The Fractal may not be complete and the Cycles Model suggests a high volatility presence on Friday. Thus, the Master Cycle may terminate with a final low and a possible reversal on Friday.
Short VIX positions may disappear today as the November 13 options chain only shows a meager 1047.00 contracts at 16.00 while long gamma may begin at 20.00 and remains strong to 30.00.
TNX futures are consolidating in the overnight session after yesterday’s ramp. There may be yet another surge above 45.00 before pulling back. The bond market anticipates another .25 rate cut with a 99.8% certainty. What may move the markets is the commentary after the announcement. There is the real possibility of another policy error as the Fed attempts to moderate interest rates in the face of rising inflation.
ZeroHedge observes, “With global markets in chaos in the aftermath of the Trump victory – and what appears to be a Republican sweep – and bond yields soaring by the most since the covid crisis, some were worried that today’s 30Y auction would be a historic disaster and may even fail, as technically improbable as that may be. In the end, with 30Y yields blowing out by more than 20bps, the biggest rout since 2020, such fair proved to be groundless because today’s sale of $25BN in 30Y paper ended up being very solid for the most part.”
Japanese Yen futures may have reached their Master Cycle low yesterday, day 267 of its Master Cycle. This morning’s futures show a rise to 65.195 in early signs of a reversal. Overhead resistance lies at 66.00, above which a buy signal may be found. The initial rally may take the Yen back to its Cycle Top at 70.56 by the end of the month. A rally above 71.55 may set off the Head & Shoulders formation. No one is expecting a reversal of that magnitude, yet the Cycle Model trending strength for that period.
USD futures have pulled back to 104.39 this morning, as it may be consolidating or correcting its recent ramp higher. The current Master Cycle may be complete in the next two weeks. Normally the contraction would continue for the duration of the Master Cycle. However, a Fed policy error may cause the USD to surge even higher.
Gold futures have bounced from the 50-day Moving Average and Diagonal trendline at 2652.32 to test Intermediate resistance at 2701.25. The bounce may not last as it may resume the decline beneath the above-mentioned supports. The next support beneath that is the mid-Cycle at 2416.76.
Crude oil has declined to 70.69, beneath its 50-day Moving Average at 71.04. The may create a confirmed sell signal for oil. Be aware that the Cycles Model indicates a possible decline to the end of the year. The Head & Shoulders target may be the appropriate target for this move.