3:26 pm
Bitcoin has tumbled beneath short-term support at 96720.00. This offers an aggressive sell signal (lighten your long positions). Today is day 270 in the old Master Cycle. The chance of a new ATH is miniscule. Instead, one should consider the potential for a deep decline. Contrary to popular belief, bitcoin is not an alternate currency. It is a trading vehicle and may act as such.
11:05 am
SPX has crossed beneath the daily Cycle Top support currently at 6085.94 and the lower trendline of the small Ending Diagonal formation. This constitutes an aggressive sell signal. Take appropriate action.
8:00 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 made its all-time high at 6099.97 on Friday morning, day 273 of an aging Master Cycle. It has since traded lower. This weekend’s SPX futures have traded down to 6077.60 this morning and is currently hovering near that level. The Cycle Top is at 6078.22 this morning. A decline beneath that level may induce an aggressive sell signal. Aggressive sells imply one may lighten the long exposure. The Cycles Model indicates a potential four weeks of decline directly ahead. A normal Wave (1) decline may traverse to the Cycle Bottom at 4044.05. Considering that we are in abnormal times, the decline may go lower.
Today’s options chain shows Max Pain at 6090.00-6095.00. Long gamma lies directly above 6100.00 while short gamma lies beneath 6085.00.
ZeroHedge reports, “S&P futures are flat after hitting a fresh record highs on Friday and ceding brief gains sparked by China’s monetary-policy shift, as investors focused on an upsurge in geopolitical risk and the outlook for interest-rate cuts in the US and other major economies. As of 8:00am, S&P futures dipped 0.1% and Nasdaq 100 futs were down 0.2% after rising earlier following China’s announcement that authorities will embrace a “moderately loose” strategy next year. More steps on the fiscal side could be unveiled at Wednesday’s Central Economic Work Conference. While Beijing’s pledge boosted Asian markets and supported US-listed Chinese shares in premarket trading, gains elsewhere were short-lived with South Korean stocks plunging as the political crisis deepened. Pre-mkt, Mag7 is mixed while bond yields are flat to up 2bps. the Bloomberg dollar index is flat even as the yen tumbles as hopes that the BOJ will hike in December once again crumble. Commodities are stronger, led by energy and base metals, as moves are being driven by the positive stimulus news from China. As the Fed enters its blackout window, the key macro data points are CPI/PPI, though it would take a tail-risk type of print to move the Fed away from cutting next.”
VIX futures traded up to 13.60 this morning as the Master Cycle low may have been made on Friday, day 260 for the VIX. Trending strength may be rebuilding as the first surge of trending strength may appear by the end of the week. VIX shows four weeks of potential rally to the first week of January. Holiday cheer may turn to gloom as the current administration is scorching the landscape in Washington prior to the new administration.
The December 11 options chain shows Max Pain at 14.00. Beneath 14.00 is a mixed ag, not clearly favoring the shorts. Long gamma may begin above 14.50 and is strengthening to 28.00. The December 18 options chain shows Max Pain at 17.00. Short gamma is growing between 13.00 and 16.00. However, long gamma kicks in at 18.00 and runs strong to 60.00.
The Shanghai Composite reached a high today at 3426.65, testing its Cycle Top at 3630.19. The Chinese politburo may be shifting its stance to moderately loose. This is the first time since 2008 that it took such a position, sparking a recovery in the earlier attempt. Will it work again this time? It is likely that it made its Cycle high on day 265 of its current Master Cycle. A reversal may be imminent. This may be the beginning of a worldwide swoon in stocks.
Bitcoin is consolidating beneath its all-time high. Currently it is testing short-term support at 97130.45. Should it decline beneath it, an aggressive sell signal may be made, suggesting one should lighten his/her positions. A further decline beneath the Cycle Top at 93087.00 gives a clear sell signal. The next month may be very choppy with larger moves, but no new high anticipated.