3:05 pm
SPX has just crossed the lower trendline of the 4-month Ending Diagonal at 5970.00. This is a confirmed sell/sell short signal. SPX is now treading at November levels. This is serious.
2:08 pm
SPX is now making a new low beneath short-term support. This creates an aggressive sell signal. Confirmation lies beneath Intermediate support at 5984.57. Take appropriate action.
8:00am 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 rose this morning to 6067.60 thus far. Resistance lies near 6085.00 while support lies near 6030.00. Institutions (the Fed?) often buy futures in the premarket to attract retail buyers who fear missing out. Their positions are often taken off by the end of the day, leaving retail investors for better or worse. The all-time high in the DJIA and SPX remains at December 6. There are approximately two weeks left in the current Master Cycle which may go either way. Let’s turn to today’s Fed decision. .According to the market, there’s a 95% chance. That will bring the fed funds target range down to 4.50%-4.25%, the Fed Funds rate to 4.33%, and GC between 4.40% and 4.35%. If so, it may be the last cut. However, we may see rate increases as early as January, due to Yellen’s overemphasis on auctioning off T-bills rather than notes and bonds to artificially keep rates low.
Today’s options chain shows Max Pain at 6070.00. Long gamma becomes strong at 6100.00 while short gamma may begin at 6030.00.
ZeroHedge reports, “US equity futures and global stocks rebounded on Wednesday as investors awaited the Fed’s final policy decision of the year, where the US central bank is widely expected to cut 25bps. As of 8:00am, futures for the S&P 500 advanced 0.3%, on pace for their 58th record high of the year, while Nasdaq 100 futs rose 0.2% after both indexes fell on Tuesday. We are seeing some momentum reversions early with TSLA (-2.5% pre mkt after closing at a new ATH yday) and NVDA (+2.7%) the standouts on light news. The Stoxx 600 was set for its first day of gains in five sessions, while Asian equities also gained, snapping a three-day losing streak (FTSE +20bps, CAC +40bps, DAX +40bps, Nikkei -72bps, Hang Seng +83bps, Shanghai +62bps). US treasuries dropped, the yield on the 10Y TSY rising 2bps to 4.41% as the dollar index also gained, as did oil, with WTI rising 0.6% to $70.51. Elsewhere, Bitcoin slid 1.55% to $104,740 as global equities chop around ahead of FOMC this afternoon (consensus expects 25bps cut and messaging of slowing pace of cuts going forward, full preview here). If that wasn’t enough, tomorrow we also get BoE/BoJ. On today’s macro calendar we get housing start and building permits, but the highlights is the 2pm FOMC decision and 2:30pm Powell press conference.
SPX breadth peaked on the 29th of November and has been heading down since then, despite the expectation of a .25% rate cut. There is a lot of selling under that rosy exterior.
VIX futures have eased back, from yesterday’s high at mid-Cycle resistance at16.05, to 15.27 this morning. The pullback may be short-lived, as trending strength is due to arrive by the end of the week.
While today’s options chain is closed to new investors, there is a huge open interest at the 60 call strike today. A large buyer may have sneaked under the wire to place that order in the pre-market.
TNX is consolidating after yesterday’s run-up. There is a possibility of retesting Intermediate support at 43.21. Otherwise the trend continues higher. There is no indication of a rate cut ing the Cycles Model. However, we cannot rule it out.