3:10 pm
SPX declined to the trading Cycle bottom at 5861.18, then bounced to the 50-day Moving Average at 5938.28 this afternoon, where what was formerly support became resistance. It may linger just beneath the 50-day until the New Year in light trading. However, Trending Strength may come back at the end of the week with possible new lows.
9:51 am
BKX has begun its decline from its Master Cycle high on Friday, December 27. This is critical because it is an indicator of overall liquidity. The Cycles Model suggests a decline in liquidity until the end of January. During that time it has the capability to decline to the Cycle Bottom at 91.22.
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 Christmas Morning! The Christmas Season extends to January 6, the Feast of the Epiphany.
NDX futures have declined beneath the upper trendline of the 13-month Ending Diagonal at 21300.00, giving an aggressive sell signal (lighten long positions). The next support is at the Intermediate level at 21223.04 (bounced there at 7:30 am), where a confirmed sell signal may be given (sell/sell short). The 50-day Moving Average lies at 20906.07. The decline is happening despite record-breaking inflows last week. The reason? What comes to mind is year-end rebalancing combined with the buyback blackout.
Today’s options chain shows Max Pain at 21475.00. Long gamma may begin above 21500.00 while short gamma resides beneath 21425.00.
SPX futures declined to 5910.40 thus far at 8:20 am, crossing beneath the 50-day Moving Average at 5936.52. This action may confirm the sell signal which is commonly recognized among traders. There may be a bounce at round number support at 5900.00. The next following level of support lies at the 100-day Moving Average at 5779.89 while the mid-Cycle support resides at 5571.75.
Today’s options chain shows Max Pain at 5975.00. Long gamma may begin at 6000.00 while short gamma may begin beneath 5950.00 but strengthens dramatically beneath 5925.00. Should SPX decline beneath 5900.00, a panic sell-off may ensue for no apparent reason due to short gamma.
ZeroHedge reports, “US equity futures dropped sharply on the second to last day of 2024, crushing a deathly blow to any hopes of a belated Santa rally, as the powerful meltup in technology shares and among momentum chasers crumbled in the final trading sessions of 2024. As of 8:00am, S&P 500 futures slumped 1%, dropping for a 3rd straight session and signaling extended weakness on Wall Street after Friday’s retreat led by tech megacaps weakness; Nasdaq futures also slid 1%. Monday’s weakness was broad based: Europe’s Stoxx 600 index retreated, while Asian stocks snapped five days of gains. Treasuries reversed an earlier slide, and the 10-year yield dropped from near the highest levels since May. The dollar also reversed earlier gains while gold and bitcoin were relatively flat. The US economic data calendar includes December MNI Chicago PMI (9:45am, several minutes earlier for subscribers) and November pending homes sales and December Dallas Fed manufacturing activity (10am)”
VIX futures rose to 18.38, remaining within Friday’s trading range. The Cycles Model shows no immediate volatility in the calendar, but strength returns next week.
Tuesday’s options chain shows Max Pain near 20.00. Short gamma resides between 15.00 and 19.00. Long gamma sows some activity between 22.00 and 35.00, but not a lot of conviction.
TNX has pulled back to its daily low at 45.57. Futures made a low of 45.54. The Cycles Model offers no immediate direction. However, trending strength may begin to rise later this week.
ZeroHedge observes, “Former Wall Street money manager and financial analyst Ed Dowd of phinancetechnologies.com is back with more data on how the Biden Administration propped up a failing economy during the 2024 election year.”
Bitcoin continues its slide beneath the 50-day Moving Average at 96393.70. The Cycles Model suggests up to another week of decline ending the current Master Cycle. While on a confirmed sell signal, having a week left in the Master Cycle would make an investor cautious.
Gold futures have been pressed down at the Intermediate resistance at 2651.85 for the past week and may be proceeding lower. It remains on a confiremd sell signal and may continue in that pattern to the end of January.