2:20 pm
SPX may have completed its fractal form at 5960.37 this afternoon near the 61.8% Fibonacci retracement value of 5955.00. A reversal below Intermediate support at 5851.48 moves SPX to a sell signal. Today is day 258 of the Master Cycle. Although it made its all-time high on day 248, it may have “bent the knee” at the appropriate time in recognition of the larger pattern.
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.”
Good Morning!
SPX futures have reached an overnight high at 5938.60 and is lingering near its overnight high. A rally above 5942.28 closes the gap and a further rally above 5960.00 is an indication of an imminent new spike all-time high. I had warned that the SPX is in a high strength/high volatility period until the end of the week. This may give either the strength to approach a new high near 6100.00 or a reversal beneath the 50-day Moving Average at 5785.71. Speculators are ignoring the threat of nuclear war so amply demonstrated by the firing of (non-nuclear) Russian ICBMs into Ukraine.
Today’s options chain shows Max Pain at 5915.00. Long gamma may be found above 5935.00 while short gamma lies beneath 5900.00.
VIX futures backed down to 16.47 this morning. It may challenge the mid-Cycle support at 16.03. Yesterday’s challenge of the 50-day Moving Average at 18.16 tells us that this may be a good time to “buy the dip.”
The November 27 options chain shows Max Pain at 17.00. Short gamma still remains between 12.50 and 16.00. Long gamma may begin at 20.00, but doesn’t have much conviction above it.
The Shanghai Composite reached a high of 3378.52, just beneath the Cycle Top resistance at 3380.64. It now has the capability to resume its decline to the Cycle Bottom at 2704.06 in the next two weeks. There is the possibility of breaking through the neckline of the Head & Shoulders formation, which may trigger a further decline. A decline of that magnitude may have anegative effect on world-wide liquidity.
The Nikkei 225 Index fell beneath its 50-day Moving Average at 38340.02 today, giving a firm sell signal. The Cycles Model also gives the Nikkei two weeks of decline. The Neckline of the Head & Shoulders formation lies just above 31000.00. The options are either a bounce at the neckline, giving the Nikkei a short reprieve, or a cascade throughthe neckline with dire consequences.
European stock indices have been declining since September 27, as shown in FEZ. Currently, the EuroStoxx 5o ETF is due for a Master Cycle low this week. The reason I am showing the overseas stock indices is to show they all are broadcasting varying signs of weakness. The worst are the European indices. These charts may be indicating that money is flowing from the overseas indices toward the US indices lately, giving the SPX the ability to make another ATH, despite deteriorating fundamentals..
TNX remains in consolidation, but it may not last. The Cycles Model indicates a serious jolt of trending strength coming over the weekend and during the following week. Most analysts do not consider this rally to be long term and are looking for some relief from rising yields. However, the impending increase in Treasury borrowing is pressuring yields higher and may affect stock valuations, as well. Cheap liquidity may go by the wayside as Treasury borrowing crowds out private markets. The next target for TNX may be 53.00-55.00.
Bitcoin is closing in on its numerical target of 100000.00 on day 252 of the Master Cycle. There is less than a week left to make its target…and possibly an overshoot. Prepare yourselves for a reversal that you may not want to participate in.