6:45 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! I have a morning engagement, so I will do an abbreviated session for now.
SPX futures have been trading between 5865.00 and 5889.00 over the weekend. There doesn’t seem to be much enthusiasm for equities after Friday’s debacle. Goldman advises that hedge funds may have started aggressively shorting stocks. Of course, The All-time high was 6017.31, made on November 11. SPX is on an aggressive sell signal since Thursday afternoon. An aggressive sell implies one should lighten long exposure. Just beneath the weekend low is Intermediate support at 5827.52, where a confirmed sell signal may lie. Further confirmation lies beneath the 3-month trendline and 50-day Moving Average at 5759.85. The new trend is due to remain in place until early January.
Today’s options chain shows Max Pain at 5890.00. Long gamma may begin above 5900.00 while short gamma resides beneath 5970.00.
ZeroHedge reports, “S futures are higher even as European and Asian markets fail to stay positive, as traders waited for fresh pointers on growth and the future of interest rates. As of 8:00am ET, S&P 500 futures rose 0.1%, while Nasdaq 100 futures added 0.3% as Tesla shares surged 8% in premarket trading on speculation Trump’s team will ease self-driving car rules; the boost was enough to offset the 2% drop in NVDA ahead of its earnings Wednesday. Bond yields resume their trek higher (10y 4.47%, +3bp this morning) after sliding on Friday, while the USD is trading near session highs erasing an earlier drop. Commodities are mostly higher led by oil (+0.9%), aluminum (+5.3%) and precious metals (gold +1.1%, silver +1.5%). Gold rose more than 1% after Goldman analysts predicted the precious metal would hit a record by the end of next year. Bitcoin recovered from its biggest two-day retreat since the US vote to trade past the $90,000 mark. This week, the key focus will be earnings (NVDA, WMT, TGT) and global PMIs.”
VIX futures rose to 17.00 over the weekend after giving a buy signal on Friday above mid-Cycle resistance at 15.98. The new volatility trend may remain in place until early February. All indications are for rough weather ahead.
The November 20 options chain shows Max Pain at 18.00. Short gamma resides between 13.00 and 17.00. Long gamma may begin at 19.00, going strong to 55.00.
I have spent an extensive period building the Bitcoin Cycles Model. It still may need to be proven over time, but here it is, with its potential promises and shortcomings. The Model currently shows another two weeks of rally may be left with a potential target near 100K. Round numbers are very powerful attractants. This is no exception. However, there seems to be nothing beyond that, except open air. The reversal may be swift and violent, as nearly everyone is “all in.”.
The Shanghai Composite is slipping beneath its Cycle Top support at 3385.40, putting it on a sell signal. The balance of November may be spent in decline, with trending strength rising by mid-week. While short-term bounces may come into play as the Shanghai declines, the target may be the Cycle Bottom and Head & Shoulders neckline at 2700.00.
The US 10-year Bond yield appears to be consolidating near Friday’s breakout high. The Cycles Model calls for a steady rise this week, with strength rising toward the end of the week. The Cycles Model maintains that yields may rise through the end of the year. Potential targets may include 5.3%, 6.8% and 8.2%. The Biden administration is doing its utmost to leave scorched earth behind it.
Japanese Yen futures are consolidating after Friday’s reversal from its Master Cycle low. What follows may be a rally lasting up to 3 months.