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.
1:50 pm
BKX may be coming down from yesterday’s Master Cycle high at 135.28. It appears to be breaking down beneath its trendline near 133.50. The next support is the 50-day Moving Average at 131.36. Should the decline progress beneath that, the Cycles Model suggests a decline lasting to mid-April. The Broadening Top formation offers a minimum target near 90.00.
ZeroHedge cautions, “”Commercial real estate is the next domino to fall,” warns Nomi Prins in her 2025 outlook. With rising vacancies, store closures, and mounting debt, banks are playing a dangerous game of “extend and pretend.” Prins reveals how massaged numbers and risky loan practices are masking the true state of financial instability.
“More problems are coming in—it’s only a matter of time,” Prins cautions.”
1:40 pm
SPX has declined beneath the double resistance at 5950.70. A breakdown occurs beneath 5934.00. Short gamma may play a powerful role in renewing the decline beneath 5900.00. The Cycles Model suggest the strength of the decline may pick up tomorrow and be in full force by Monday.
7:30 am
Good Morning!
SPX futures rose to 5977.50 in the overnight session, an unusually strong 82.2% retracement of the January 6 decline. Cycles are measured in price and time. Today’s retracement stretched both, but did not exceed short-term resistance at 5985.00 nor did it exceed the Master Cycle high at 60231.84. In time, the hourly Cycle may have extended 4.3 hours beyond the average hourly Cycle. With monthly options expiration due on Friday, it appears that the dealers may have had some influence on this outcome. In any event, the SPX may open the cash market beneath the 50-day Moving Average, reinforcing/reinstating the sell signal. The may be a “sell the bounce” event.
Today’s options chain shows Max Pain at 5925.00. Long gamma may begin above 5950.00 while short gamma resides beneath 5900.00.
ZeroHedge reports, “US equity futures are higher led by Tech one day after a powerful burst higher in stocks following a weaker than expected CPI. As of 7:00am. S&P futures are up 0.2% extending on Wednesday’s 1.8% rally, the best day since the November election; Nasdaq futures rise 0.5%, led by NVDA (+1.5%) and AAPL (+0.6%) after stellar earnings by TSMC and a boost to the company’s 2025 CapEx spending budget. Europe’s Stoxx 600 climbed for a third day, with luxury goods maker Richemont soaring 18% after it reported a jump in jewelry sales. Its results lifted an index of European luxury stocks by the most since March 2022. Bond yields are 1-2bp higher after yesterday’s rally; USD is higher. On Commodities, base metals rallied ahead of major China data release tonight. Today, key macro catalysts are Retail Sales (analysts expect a 0.6% MoM print , down from 0.7% prior while the Control Group is expected to print unchanged at 0.4%) and banks earnings (MS and BAC).”
VIX futures rose above critical support at 16.27-16.30 where two support structures lie. The retracement decline may be complete and Cyclically on time. Note that VIX may have established an uptrend, denoted by a new trendline. Investors have not decided to seek shelter/hedging yet. MOst of the trading in VIX is very short term, which does not show up in theVIX, which measures positions of 30 days or more.
The January 22 (monthly expiration) options chain Shows Max Pain at a contested 18.00. Short gamma is packed between 14.00 and 17.00. Long gamma begins at 20.00 with concentrations at 30.00 and 40.00.
TNX is consolidating in the lower half of yesterday’s trading range. The Cycles Model suggests that the decline may become supercharged at tomorrow’s options expiration. The initial target for this pullback may be the declining trendline at 44.40. However, the correction may take up to two more weeks, making the mid-Cycle support a probable target. Yesterday saw the second biggest day for TLT calls in its history.
Bitcoin may have reached its retracement high in the last 24 hours. This morning it peaked at 100867.35 and may have reversed down. The January 6 high remains intact. The Cycles Model suggests the decline in bitcoin may take another month. It has yet to break beneath the 100-day Moving Average at 97298.40 which demarks the 5-month uptrend. Beneath that is a lot of open space.
USD is consolidating above its Cycle Top support at 108.94. However, that may not last. The Cycles Model suggests that the USD may decline to the mid-Cycle support at 104.40 by the end of the month. From there, a powerful rally may emerge until mid-March.
Gold futures have reached a morning high at 2747.39, possibly completing a very long and steep retracement of the December 12 decline. If so, a very sharp decline may follow lasting 2-3 weeks. Should this happen, do not underestimate the strength of the decline.