12:45 pm
Correction: This morning I mentioned that Bitcoin had made its secondary high yesterday at 101979.09. Instead, it made its retracement high this mid-day at 102598.04. The balance of this morning’s report is largely correct.
12.25 pm
BKX is hovering just above Intermediate support at 131.87. It is beneath the Cycle Top at 134.48. It is due for a bounce. Should it rise above the Cycle Top resistance, it may go to the 61.8% Fibonacci retracement at 136.81 or higher by year-end. Should it be repelled at the Cycle Top and decline through Intermediate support, it may resume its decline to lower (unspecified) levels.
7:20 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! This will be a short blog as I am leaving for a breakfast appointment. I may return for further commentary after the open.
SPX futures have declined to a morning low of 6071.60 after failing to make a new ATH. It remains beneath the Cycle Top as well, indicating that investors should be lightening their positions. Should yesterday’s close remain, SPX may begin its descent. Short-term support is at 6023.00, reinforcing the aggressive sell signal. Intermediate support is found at 5944.42, giving a confirmed sell signal.
Today’s options chain shows Max Pain at 6080.00. Long gamma may begin at 6090.00. Short gamma lies beneath 6070.00. The options market are tightly wound for a big move.
ZeroHedge reports, “US equity futures and European bourses trade lower as bond yields rise 2-3bps across the curve as Treasury yields rose ahead of the Fed’s policy meeting next week and ahead of today’s ECB rate cut (preview here). As of 8:00am ET, S&P futures are down 0.2% and Nasdaq futures slide 0.4% after disappointing guidance by Adobe sent the stock tumbling, even though pre-mkt, Mag7 names are mostly higher led by GOOG/TSLA, but Tech overall is lagging after the Nasdaq set a new ATH yesterday. Both indexes made strong gains on Wednesday, when an in-line US inflation print cemented swap markets’ expectations of a a quarter-point rate cut at the Fed’s Dec. 17-18 meeting. The USD is weaker and commodities are mostly bid led by energy, Ags, and base metals. Banks are weaker despite positive reports at an industry conference. Today’s macro focus is on PPI (Core exp. 0.2% MoM, 3.2% YoY) and Jobless Claims (exp. 220K).”
VIX futures are consolidating mid-range in yesterdays trading. While the VIX is not yet on a buy signal, the VIX of VIX (VVIX) id now on a buy signal, suggesting large players may be buying the VIX futures and options. The Cycles Model also indicates a surge of trending strength by the weekend.
9:46 am
Bitcoin put in its secondary high yesterday at 101979.09 at the 4.3 month interval in the Cycles. Since then, it has consolidated above short-term support at 97645.09. It is on an aggressive sell signal, suggesting a lightening of long positions. The next support is the Intermediate-term support at 94769.71, where a firmer/confirmed sell signal may be procured. The Cycles Model suggests that a discernible low may be made in 1-2 weeks, followed by a correction heading into early January. A “normal” Cyclical low on the initial decline may be the August 5 low at 49200.00. This is a first for bitcoin, so there are no assurances of performance.
TNX is challenging Intermediate-term resistance at 43.05 as I write. Today is a day of strength, suggesting the breakout above resistance may be accomplished. The Cycles Model calls for three more weeks of rally in yields. The potential targets for this rally are the Cycle Top at 47.50, then 50.00, followed by 53.00. Today’s activities have thrown the bond market into confusion.
Yesterday, ZeroHedge wrote, “After yesterday’s solid 3Y auction, the market considered the results briefly, pushed yields lower for about a basis point and then saw the recent move wider in yields extend overnight, with some wondering if yesterday’s auction success would be repeated in today’s sale of $39BN in 10Y notes (specifically a reopening of 9Year-11Month cusip CLW9). The answer was yes and then some.
Pricing at a high yield of 4.235%, down from last month’s 4.347%, the auction stopped through the When Issued 4.250% by 1.7bps, an improvement to last month’s 0.3bps through and the biggest stop through since June.”
In contrast, this morning ZeroHedge wrote, “According to the latest Treasury data released today, in November – the second month of fiscal 2025 – the US spent a massive $584.2 billion, a 14% increase from the prior year, and a record for the month of November. For those who remember out outrage from a month ago, will also remember that the latest deficit number follows what was also a record government outlay for the month of October.”
USD continues its rally toward the Cycle Top at 107.62. The current Master Cycle goes to the year-end, so there is a probability of exceeding that target. Additional resistance levels may be found near 110.00. Should it go higher, it may be the terminus for Intermediate Wave (1).