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 are hovering above the Cycle Top at 6042.18 this morning. A new high was not made overnight. The upper Diagonal trendline lies near 6065.00 and appears to provide resistance to any move higher. Today is day 270 in an aging Master Cycle. The ending fractal is complete. While the SPX may go nominally higher, the NYSE Hi-Lo Index produced its last high a week ago and shows weakening internals. The stock market may be a victim of its own success, but investors are running out of attractive alternatives. This may be a time to consider cash as an investment option. An aggressive sell signal (lightening the long positions) may be made with a close beneath its Cycle Top at 6042.18.
Today’s options chain shows Max Pain at 6040.00. Long gamma exists above 6050.00 while short gamma resides beneath 6010.00.
ZeroHedge reports, “US equity futures are flat as the yield curve sees slight steepening; for once, the US is not benefiting from the risk-on rally seen in EU/APAC. As of 8:00am ET, S&P futures are fractionally in the green reversing earlier losses as traders await a busy line-up of Fed speakers and data releases after the index notched its 54th closing high of the year on Monday; Nasdaq 100 futures are down 0.1% even though Mag7 names are mostly higher in the premarket and Semis are bid. The USD is lower as the commodity complex catches a bid; WTI, silver, and sugar the outperformers; earlier Bloomberg reported China moved to restrict exports of rare earth metals to the US used in high-tech/military applications (gallium, germanium, antimony, and other superhard materials). Today’s macro focus will be on JOLTS and Vehicle Sales.”
Bitcoin has completed its corrective bounce and has resumed its decline. The failed bounce may be visualized as an aggressive sell signal (lighten long positions). A confirmed sell signal may arise at a decline beneath the Cycle Top, currently at 89356.55. The sentiment for bitcoin is so strong that the majority of investors may hold or buy the dip, thinking that it may recover. Keep in mind, however, that the net value per share was only 15480.69 only two years ago. Cycles tend to revisit the highs (and lows) over an extended period. Should this trend be complete, the next options may be to revisit the low.
VIX futures are hovering near their low, but have not declined further. VIX is in its final days of the current Master Cycle. A reversal may be imminent.
TNX is hovering at its mid-Cycle support at 42.05 after breaking through yesterday. It has made a buy signal and its time to consider the upcoming targets. Cycles Model suggests rising yields until early January. Today the Treasury is offering $75 billion in 42-day notes. The remainder of the auction schedule will be announced on December 5. The Cycles Model observes that trending strength may arise on that date, as well.
USD futures are consolidating after yesterday’s strong reversal. However, there is more to the correction/bounce. The first target may be the Cycle Top resistance at 107.41. Keep in mind that the final target may be the mid-Cycle support at 103.93.
Japanese Yen futures have made a new high at 67.04 this morning. The Cycles Model suggests greater heights for the Yen, as it is entering a period of strength later this week. Those in the Yen carry trade are finding their positions growing more uncomfortable. The Question is, “Where does the pain begin?” This move is making liquidity more expensive than anticipated.
Euro futures are testing the Cycle Bottom resistance at 105.25 this morning. A failure to regain ascendancy over that support may throw the Euro into another two weeks of decline. The ultimate target may be 95.00, or lower..