1:30 pm
NDX is completing a new all-time high, while SPX and INDU may have already made theirs last Friday. One reason for this lengthy rally in NDX is the fact that it has advanced for 4.3 months from the August 5 low as of yesterday. 4.3 is an important integer in calculating time for the markets. For example, the length of time from the October 27, 2023 low to the July 16 high in the markets took exactly 8.6 months. In addition, This afternoon is an important (short-term) Cyclical turning point. for the SPX and INDU, as well.
7:45 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 bounced to 6044.00 in the overnight session. Should it not go higher, it suggests a resistance at 6045.00, which may force a possible decline to yesterday’s low at 6029.89. Should it go lower, short-term support lies at 6010.48 may hold the decline from further damage. Round number support at 6000.00 is a “must hold” for options dealers. If so, a bounce may result, back to 6045.00. The rationale is that yesterday’s fractal decline may not be complete. Yet tomorrow’s model suggests a possible snap-back to retest today’s overhead resistance. Cycles are behavioral, not mechanical. However, there are guidelines that may influence the market’s behavior. From those guides, one may construct if/then situations to map the fractals.
9:00 am
The ZeroHedge announcement that re-inflation continues in the CPI may have sparked a reaction in the early morning hours to rally the SPX to 6061.70 thus far. The 61.8% Fibonacci retracement value is 6066.67. This may be an attempt to front-run the imminent decline by squeezing the shorts/increasing their own short positions. The defense of the 6000.00 short gamma level may be off the table, because Wall Street may be going short. In the meantime, Wall Street has issued some soothing remarks.
Today’s options chain shows Max Pain at 6060.00. Long gamma may begin above 6075.00 and strengthened at 6100.00. Short gamma may lie beneath 6040.00. It is very strong beneath 6000.00, which may be defended by the dealers…or not.
ZeroHedge reports, “US equity futures are flat ahead of the CPI report that will determine if the Fed cuts rates next week. As of 8:00am, S&P and Nasdaq futures are up 0.1%, with the Mag 7 mostly higher led by NVDA, GOOG and TSLA. Bond yields and the dollar are also higher after a Reuters report that Chinese leaders are considering allowing their currency to weaken as they brace for higher tariffs under a second Donald Trump presidency. In commodities oil is up +1.0%, and gold is trading just shy of $2700. The main macro focus will be CPI at 8.30am ET (see our preview here). We will also have 10y auction at 1pm ET and ADBE earnings after the close.”
VIX futures are holding steady beneath the 50-day Moving Average at 14.61. The fractal off the Master Cycle low does not appear complete, so we await further developments. The Cycles Model suggests that trending strength may return by the end of the week.
Bitcoin may be completing a bounce toward 100000.00. The 61.8% Fibonacci retracement value is at 99657.00. A reversal to lower levels may occur once the retracement is complete. In talking with some bitcoin owners, who recognize that the top is in, 100k appears to be a handy exit point on the rebound.
TNX is rising, but may be due for a brief retest of the mid-Cycle support at 42.03. Today the US Treasury will hold an auction for $30 billion in 10-year notes, which does not elicit a strong reaction in the Cycles Model. However, the CPI print has instigated the pullback (see below). tomorrow’s auction of $22 billion of Treasury Bonds may spark a surge in rates.
ZeroHedge reports, “Having accelerated MoM for the past four months, analysts expected today’s CPI print (for November) will rise once again to +0.3% MoM and they were dead on (the biggest MoM rise since April). The 0.3% MoM rise pushed headline CPI up 2.7% YoY – the highest since July…
Source: Bloomberg
Core CPI also rose 0.3% MoM (as expected) which pushed it up 3.3% YoY (not even close to the 2% mandate)…”
USD futures continue their ascent toward the Cycle Top at 107.58. The current Master Cycle is in day 254, possible giving us the high early next week. The USD correction may follow, declining down to the mid-Cycle support at 104.01 by year-end. The BRICS summit in Kazan highlighted the proposed new currency. However, the new currency has not been implemented yet.
The Japanese Yen may have completed its correction this morning by bouncing at Intermediate support at 65.40. The Yen is now garnering strength for a potential breakout higher. New trending strength is emerging through the rest of the week, according to the Cycles Model.