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.”
SPX closed beneath the Cycle Top support/resistance at 6033.67 on Friday. It declined to 6019.70 over the weekend, then rose up to challenge the Cycle Top this morning. This raises the question, “Is the all-time high in on Friday?” …or will it extend another day or two? Today is day 269 of an extended Master Cycle. Investors await the outcome of Black Friday.
Todays options chain shows Max Pain at 6030.00. Long gamma hold ascendancy above 6050 while short gamma holds sway beneath 6010.00.
ZeroHedge reports, “Futures are lower to start the new month as the US Dollar pushed higher, partially in response to Trump’s mandate that BRICS drop non-USD FX ambitions but also because the crisis swirling around the French government deepened, dragging on the euro. As of 8:00am ET, S&P futures are down 0.1%, but well off session lows, even as data showed Black Friday sales grew at a faster pace in the US this year; Nasdaq 100 futures are flat. The muted action comes after the S&P recorded its strongest month of the year, rising +5.7%, and is up 8 of the past 9 days. Pre-market, Mag7 are mixed, Semis are weaker, and Software is stronger; Financials are flat. Treasuries fall as traders prepare for US data that may influence the outlook for interest rates. Crude oil is higher, leading Energy to outperform the rest of the commodity complex which is seeing weakness in Ags and Precious. Today’s macro data focus is on ISM-Mfg and Construction Spending but the key this week is Friday’s NFP print to shape Dec Fed rate cut expectations.”
VIX futures consolidated this morning after making a Master Cycle low at 13.49 on Friday, day 273. This is a very extended Master Cycle and a reversal is expected.
Wednesday’s options chain shows virtually no short gamma. Long gamma starts at 14.00 and gains some momentum at 17.00. The largest long holdings are at 25.00.
TNX rose to a morning high at 42.40 after closing beneath the mid-Cycle support/resistance at 42.05. By rising above the mid-Cycle it has reconfirmed its buy signal. The Cycles Model suggests the rally may continue through early January with a possible minimum target of 50.75.
ZeroHedge explains, “For some months, I’ve described how the structural issues in the Treasury market – namely that dealers have increasingly shallow warehousing capacity for repo financing – foretell an inevitable return to the cataclysmic funding conditions of March 2020. While there has been some improvement, like the proliferation of sponsored repos that free net balance sheet space, these changes are like steering the Titanic after it’s hit the iceberg. Sweeping changes are what’s needed, and sweeping changes don’t come without cause.”
Bitcoin may have completed its corrective phase of the decline from its all-time high. If so, we may expect the decline to accelerate, testing/challenging the Cycle Top at 88820.24 where a sell signal may await. Today’s move lower may be considered an aggressive sell signal,, suggesting a lightening of any long positions.
The Shanghai Composite bounced today, but fell short of the Cycle Top resistance at 3405.62. It may extend its Master Cycle another day to reach that resistance, with a possible reversal. The Cycles Model calls for a likely 2-month long decline toward the Cycle Bottom at 2702.08, or lower.
USD futures rose to 106.46 this morning, as it may retest the Cycle Top at 107.38. USD may remain in a corrective phase through the end of the year. However, a new high is not out of the question during this time.
The Yen carry trade is becoming painful for borrowers as the yen rose above its 50-day Moving Average at 66.54. Currently it is testing the 50-day for support. Should it hold, the yen has the capability of rising to its Cycle Top at 70.44. Beyond that, it may challenge the neckline of the Head & Shoulders formation at 71.50. This may spark a liquidity crisis among institutional investors that are using the carry trade for funding.