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.
10:20 am
GKX, the Agricultural Index, has declined beneath its trendline after breaking out of it. The Cycles Model suggests a decline lasting about a week to correct its new uptrend. A suggested target may be in the range of 353.00-360.00. A shallow decline may leave room for yet another probe at the Fibonacci levels. It may drop beneath the 50-day Moving Average, temporarily neutralizing the existing buy signal while in a correction. One may view ag stocks as a “buy on the dip” at this time.
ZeroHedge reports, “The worsening global cocoa squeeze has taken a new turn, with US chocolate giant Hershey Co. reportedly seeking approval from the Commodity Futures Trading Commission (CFTC) to purchase a massive amount of cocoa through the New York exchange. The move highlights that cocoa cost inflation will get even more extreme in 2025.”
ZeroHedge further observes, “Wholesale egg prices, as tracked by the Urner Barry Egg Index, have reached record highs at the start of the new year. This surge is mostly driven by the ongoing devastating impact of Highly Pathogenic Avian Influenza (HPAI), which has crushed commercial flocks and dented the nation’s egg-laying capacity. ”
Good Morning!
SPX futures are consolidating in a tight range between 5887.00 and 5914.00. The markets are closed today in observance of the death of former president Jimmy Carter. A quiet day is expected on the domestic scene, but markets are still open overseas. To recap, the Master Cycle was completed on January 6 at 6021.04 and is due for a possible 1-month decline. The all-time high was made on December 6, followed by a shallow decline and shallower bounce. While the SPX has declined beneath the 4.5-month trendline and the 50-day Moving Average, causing a technical sell signal, most investors see the market as “flat.” Stress levels are rising. The 100-day Moving Average is at 5817.50 with the 14-month trendline near 5800.00, as well. Once beneath that level, the floodgates may open to a panic decline. The subsequent supports are the mid-Cycle at 5600.00 and the 1987 trendline near 5350.00.
VIX futures are consolidating between 17.95 and 18.52. A move above 19.50 may spark a rally of surprising proportions. Especially high trending strength may affect the rally by the first week of February. In the meantime, the most popular holdings among the VIX options are the 15.00-16.00 puts.
The NYSE Hi-Lo Index issued a strong sell signal yesterday, declining to -107.00. Monday’s influx of foreign investors kept the Hi–Lo in positive territory until early this week. However, the reversal on Monday also drove subsequent foreign investors away. The buyback blackout is still in effect until the end of the month. Meanwhile, hedge funds and retail investors are net sellers. The current Master Cycle in the Hi-Lo may persist until the end of the month.
Bitcoin is consolidating after yesterday’s 10% plunge (Key Reversal) off the January 7 high. The Cycles Model suggests that conditions for a further decline may persist until mid-February. The 100-dayMoving Average lies at 94881.37 and the 4-month trendline may be at 94800.00.
TNX futures are consolidating on a closed market. Yesterday may have seen the Master Cycle high at 47.16. We may leave our options open for another day due to the circumstances.
ZeroHedge reports, “After two dismal coupon auctions to start the week, and the year, the final sale of Treasury paper in the funeral-shortened week took place shortly after 1pm when the Treasury sold $22BN in a 29 Year, 10 Month reopening, in what was the strongest auction so far in 2025.
Stopping at a high yield of 4.913%, not only was this sharply above last month’s 4.535%, but it was also the highest yield since August 2007. The silver lining: the auction stopped through the When issued 4.920% by 0.7bps, following last month’s tail.”
