7:45 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 came down to 5961.90 from yesterday’s all-time high at 5983.84. The SPX is pulling back from the three-month trendline defining the successive new highs since mid-August. While the final fractal appears complete, confirmation may be needed. The Cycles Model tells us that today is day 245 of the current Master Cycle. While it may be early, the reversal window is open. In addition, today may be a high volatility day, followed by a high strength day on Monday. This suggests either another spike higher or a possible strong reversal.
Today’s options chain shows Max Pain at 5950.00. Long gamma may begin above 5980.00. Short gamma is in short supply.
ZeroHedge reports, “The record election rally has finally fizzled and futs are slightly lower after China’s stimulus package revealed this morning disappointed investors. As of 8:00am ET, S&P futures were trading at exactly 6,000, down 0.1% from the first ever closing high above 6,000 but still on track for its best week in a year on the prospect of tax cuts and deregulation under Trump. Nasdaq futures are down 0.3%. Bond yields are 3bp lower after the Federal Reserve delivered a quarter-point interest-rate cut and left the door open for further easing next month; the dollar reversed some of yesterday’s sharp losses when markets fretted they had taken Trump trades too far (they haven’t). Oil is down but base metals are higher. Overnight, Chinese stock futures and the yuan are lower having extended declines after authorities announced a total 10 trillion yuan ($1.4 trillion) program to refinance local government debt, which was disappointing as (1) There was no lift to the Central Govt debt ceiling, and (2) There was no direct support for consumption or the property market, (3) The only announced a debt swap, not incremental stimulus. Today, the macro focus will be on Univ. of Michigan survey, where consensus expects an increase to 71.0 from 70.5 in October, although the rebound in mortgage rates could weight on sentiment. Later tonight, we will receive China PPI and CPI releases at 8.30pm ET.”
The Shanghai Composite probed above the 61.8% retracement value at 3486.96, then slipped beneath that level to 3454.00 today. This action may have ended the extended Master Cycle. What follows may be a very sharp decline to the Cycle Bottom at 2697.80 by early December.
VIX futures made a new Master Cycle low at 14.92 this morning on day 269 of the extended Master Cycle. The Cycles Model suggests today may be a high volatility/reversal day with strength in the new trend developing next week. The “tail” of the Triangle formation may be complete.
The November 13 options chain shows virtually no short gamma. Long gamma may begin at 20.00 and currently runs strong to 25.00.
TNX futures pulled back to 42.94 in the overnight session before easing higher. Should TNX continue to behave in a phase-shift, it may resume its trek higher and in strength over the next several weeks. The Cycles Model suggests that rates may rise through the end of the year.
Gold futures slipped to 2687.50 this morning after challenging Intermediate support/resistance at 2703.11. It is on a Cyclical sell signal that becomes confirmed beneath the 50-day Moving Average and trendline at 2655.22. The next level of support lies at 2600.00. The 50-day and trendline are a potent combination, signifying a loss of the uptrend since February. Ending Diagonals tend to make complete retracements.