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
BKX may have hit its all-time high on Monday at 152.51. It has since reversed, although no signal has been given. A confirmed sell signal may emerge at the decline beneath the 50-day Moving Average at 145.43. Should the decline materialize, it may not conclude until the end of October.
8:00 am
Good Morning!
SPX futures rose to 6634.70 this morning before easing back, remaining above yesterday’s high. The rally may be in its end stage and due for a corrective decline to the end of the month. What happens after may depend on the depth of the correction. The FOMC decision on rate cuts may not be the only catalyst for the decline, although expectations for a deep cut run high. NDX has had a 10-day run of gains as of yesterday. The all-time record, I believe, was 13 days.
Today’s options chain shows Max Pain at 6600.00. Long gamma rises above 6630.00 while short gamma dominates beneath 6575.00.
ZeroHedge reports, “US equity futures are higher (duh) outperforming global counterparts, while the Nasdaq is on pace for a historic 10th day of gains. As of 8:00am ET, S&P and Nasdaq 100 futures were higher by 0.2% with Oracle rising more than 5% in premarket trading on news it may soon be handed control of TikTok. S&P 500 contracts edged higher after the US benchmark powered through the 6,600 mark on Monday. Pre-mkt, Mag7 is displaying strength across multiple members with add’l TMT support from AVGO (+1.4%) and ORCL (+3.7%). Cyclicals and Semis are poised to lead but with pockets of strength in Defensives (HC, Staples) also seen. Europe’s Stoxx 600 fell 0.2%. Bond yields are flat to down 1bps with the US Dollar broadly weaker ahead of a widely expected 25bp cut and the resumption of the Fed’s easing cycle which paused in Dec 2024 (right after Trump was elected). US Treasuries have been racing past peers, the euro is nearing four-year highs and Goldman strategists caution that the next pain point for bond traders may come in the five-year part of the curve. Both Cook and Miran will be a part of the vote. Today’s macro data focus is on Retail Sales where Feroli is below the Street seeing a 0.1% MoM print and 0.3% for the Control Group.”
VIX futures are consolidating beneath the 50-day Moving Average at 15.92 this morning. The 50-day may be a trigger point for a buy signal in the VIX. Investors are selling SPX puts in an effort to derive a profit from the collapse in volatility. This extreme behavior is due to backfire very soon.
Tomorrow’s (monthly) options chain shows Max Pain at 18.50. Short gamma rules beneath 16.00 while long gamma rises above 20.00.
TNX appears to be consolidating beneath the Cycle Bottom at 40.64. The Cycles Model suggests a shot of strength may be due today. How it manifests itself may indicate whether the decline continues lower, or an early reversal may be in the works.
ZeroHedge remarks, “In 2025, the mainstream Keynesian narrative that the United States would inevitably experience a recession and stagflation has proven to be utterly incorrect.
The American economy is performing much better than its comparable nations, is showing broad-based strength, and even has indications of accelerating growth, giving investors and consumers plenty of reason to feel more optimistic, despite the consensus estimates from earlier in the year.
The consensus was wrong.”
BTC managed to break above the 50-day Moving Average at 114570.00, but is currently in overbought territory. The Cycles Model opens the door to a 3-week decline that, should Bitcoin decline beneath the 50-day, it may test the mid-Cycle support at 104223.95, or possibly lower.
USD futures may be due to reach their Master Cycle low within the next day or two, as projected. Be aware that this may have ramifications across the board. The Cycles Model suggests the reversal may be imminent, with a possible rally in the USD to mid-October.
Gold futures overshot the Cycle Top resistance at 3704.00, reaching a high at 3737.00 this morning. It may be in the final stage of its extended rally. A reversal beneath the Cycle Top support/resistance may signal a change in trend. The Cycles Model suggests a decline may ensue to mid-November.