3:05 pm
SPX is challenging the lower trendline of the Ending Diagonal and the Cycle Top support at 6078.00 after being repelled at the upper trendline at 6100.00. You may consider this an aggressive sell signal, especially if it closes beneath 6078.00. Round numbers (6100.00) may attract speculators, but a failure to overcome resistance at that point is very telling, especially at the end of a long Master Cycle. Note that sentiment has peaked. Animal spirits are at all-time highs while the cost of put at all-time lows. Time to sell!
8:15 am The Lord’s Prayer
Our Father, who art in heaven, hallowed be thy name. Thy Kingdom come, Thy Will be done, on earth as it is in heaven. Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us. And lead us not into temptation, but deliver us from evil. Amen.
Good Morning!
SPX futures have been trading flat within a 10-point range overnight in anticipation of the Jobs Report, due at 8:30 am. Investors are anticipating a “bad” report to justify another rate reduction by the reluctant FOMC. Today is day 273 of an aging/extended Master Cycle. SPX is at the apex of the Ending Diagonal. It has been riding above the Cycle Top is at 6069.12 for the last several days. A decline beneath that level gives the first indication of a change in trend. Long positions should be reduced.
Today’s options chain shows Max Pain at 6055.00. Long gamma may begin above 6080.00 with strength above 6100.00. Short gamma may begin beneath 6055.00 with strength appearing beneath 6050.00.
ZeroHedge reports, “Futures are flat ahead of what Goldman called “the most important remaining macro report of 2024”, the November jobs report, which will directly determine if the Fed cuts rates in two weeks. S&P futures were down 0.1% at 8:00am ET, flatlining in a quiet overnight session; Nasdaq 100 futures were fractionally in the green even as Mag 7 stocks are a touch lower this morning. China’s CSI/HIS rallied, along with European Luxury/Autos names. Modest gains in the dollar put the greenback on course to rise for the ninth week out of the last 10. Treasury yields ticked higher by 1-3bps across the curve. Commodities are mostly lower for both oil and base metals; oil extended its slide to a third day. Bitcoin pulled back from its record high, after briefly tumbling as much as 7% before erasing most of the losses. Trump tapped prominent venture capitalist David Sacks as his crypto and AI guy and also picked David Perdue (former CEO of DG with excessive business experience in Asia) to be Ambassador to China last night; Today, all eyes on NFP (preview here): the Street’s estimate is for a 220k print, up sharply from 12k jobs in October, temporarily low due to hurricanes and strikes. For the unemployment rate the Street’s estimate is 4.1%.”
VIX futures are also flat, waiting for the Jobs Report to give directionality. VIX may have made its Master Cycle low on Wednesday, day 258 of its Master Cycle. The cheap hedging window may be about to disappear as the Cycles Model reveals a possible one-month (panic) rally that may rival the August 5 high.
The December 11 options chain show no short gamma. Long gamma may begin at 14.50 and strengthened at 17..00, 20.00.
TNX dipped beneath the 50-day Moving Average at 41.79 this morning at the Jobs Report release. It is possible that the dip may continue to the 50% Fibonacci level at 40.54 before making a reversal. The Cycles Model calls for the rally in yields to resume through the first week of January.
ZeroHedge reports, “After the October hurricane-driven debacle which sent last month’s payrolls print to the lowest in years, at just 12K, traders were expecting a solid bounce today, with many whispering a print that would come above the consensus estimate of 220K… and they were right: moments ago the BLS reported that in November, payrolls growth surged to 227K, the second highest print since March (after the upward September revision).”
USD futures declined to a new corrective low, bouncing off Intermediate support at 105.42. The Cycles Model suggests suggests the bounce may continue to the Cycle Top at 107.48 over the next week or so. Following that, a possible deeper decline awaits the USD through the end of the year.
The Japanese Yen bounced from the 50-day Moving Average at 66.36. However, the correction may resume shortly with a possible downside target at the mid-Cycle support at 65.84 or Intermediate support at 65.48. On