January 14, 2025

9:15 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.

11:40 am

SPX has declined beneath the 15-month trendline at 5829.00 again, maintaining its sell signal.  There are three weeks left in the current Master Cycle which may do a lot of damage to the bullish case.  The next support is the mid-Cycle support at 5613.02.  There is still the possibility of a retest of the trendline after a brief decline.  However, the  decline may become forceful after monthly options expiration this Friday.

 

10:28 am

BKX has achieved the 50% retracement value at 128.54 this morning and may extend to the 61.8% Fibonacci retracement at 129.42 yet this morning.  The higher TNX yields are not good for banks and there is a considerable amount of money moving out of banks to money market funds.

 

 

Good Morning!

SPX futures rallied to 5879.00 overnight, between the 38.2% Fibonacci level at 5867.20 and the 50% retracement level at 5896.74 based on the January 6 decline.  The futures have eased back, but may attempt a higher level yet this morning.  The bounce from the 100-day Moving Average has cleared up the Cycle structure and may offer a pivot later this morning.  An alternate view is that SPX may rally back toward the 50-day Moving Average at 5947.00, spending the rest of the day in rally mode.

Today’s options chain shows Max Pain at 5835.00.  Long gamma may begin at 5840.00, but is not strongly populated until 5880.00.  Short gamma strengthens beneath 5800.00.

ZeroHedge reports, “Global stocks and US futures jumped and the dollar slumped after a Bloomberg report that Trump’s incoming economic team is considering a gradual ramp-up in trade tariffs in a strategy that could avert a crippling spike in inflation and which JPM called “more scalpel than broad sword approach which the market seems to like.” With bond yields flat and USD weaker, as of 7:30am S&P futures are 0.3% higher and Nasdaq 100 futures gained 0.6%, and on track to snap a two-day run of losses, as all Mag7 names advanced in premarket trading, with Nvidia and Tesla up more than 2%. European bourses were green across the board, and Asian markets also bounced while emerging markets emerged from their worst start to a year since 2016. In short, until and unless Trump denies the Bloomberg report, it appears to be a broad-based rally today, into PPI and tomorrow’s CPI.  Commodities are seeing some profit-taking today with Ags/Energy lower, but Metals still bid up. Today’s macro data focus includes NFIB Small Biz Optimism, PPI, Federal Budget Balance, and 2x Fedspeakers.”

 

 

VIX futures declined to 18.52 this morning.  There is support at 17.31.  The Cycles Model suggests VIX may spend another day in decline.

The January 15 options chain shows Max Pain at 20.00.  Short gamma inhabits the space from 15.00 to 18.00.  Long gamma begins weakly at 21.00 and may extend to 30.00.  Next week’s monthly options chain may bring a marked increase in volatility as huge positions of both puts and calls have been taken.

 

TNX is consolidating beneath the Cycle Top at 48.08 this morning while the futures have risen to 48.23 overnight.  This has been an extreme move that has the equities market jittery.  The Master Cycle high may have been put in yesterday, but the CPI numbers due tomorrow may jolt the TNX higher.   Once accomplished, there may be a two-week reversal in the batters’ box.  The probable retracement may decline to the trendline near 44.40, although a decline to the mid-Cycle support at 42.24 would not be unheard of.

 

Bitcoin has bounced back to the 50-day Moving Average at 97418.00 as a retest of resistance.  The retest may be complete today, clearing the way for a 5-week decline.  Most bitcoin owners are not aware of the deteriorating technical condition of bitcoin.   Last week Bitcoin ETFs experienced their second largest outflow since their inception, suggesting a change in investor sentiment. The 100-day Moving Average at 86546.88 is near the 5-month trendline.  That is where the uptrend may be broken.

 

 

 

 

 

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