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.
8:10 am
Good Morning!
SPX futures are hovering beneath their all-time high at 6750.87 (cash) /6751.90 (futures), unable to break through resistance. Should a reversal be made, the Cycles Model suggests a month-long decline may emerge. The Ending Diagonal trendline lies near 6650.00, where a sell signal may be found. Retail investors have been net buyers of ETFs since January with only a brief pause in early April along with record purchases of call options, forcing the dealers to comply by covering them. How long can it last? A full market Cycle lasts approximately 183 market days. The market has arrived at its fullness in time. What can possibly go wrong?
Today’s options chain shows Max Pain at 6735.00-6740.00. Long gamma may begin above 6750.00 while short gamma lies beneath 6715.00.
ZeroHedge reports, “Futures are flat after the S&P, Nasdaq and Russell all made new ATHs yesterday, driven by the AI theme and a broad-based rally. As of 8:15am, S&P futures are unchanged while Nasdaq futures eke out a 0.1% gain as trader keep an eye on TSLA’s new car announcement…”
VIX futures are flat above the 50-day Moving Average at 15.80. Retail call buying in stocks has hit a record 65% of options volume last week and appear to be on a similar footing this week. Yet, VIX options are rising, largely due to hedging by large investors.
Tomorrow’s options chain shows a single holdout of shorts at 16.00. Long gamma begins at 17.00 and proceeds with active interest to 30.00. The October 22 options chain shows massive short interest in the VIX between 15.00 and 19.00. Long gamma appears above 20.00 and vigorously extends to 100.00.
TNX may be testing trendline support at 41.50 this morning. Today’s auction of $58 billion of 3-year Treasury notes may test the confidence of investors. Should it be successful, we may see TNX decline toward the Cycle Bottom at 40.31 over the next few days.
USD futures have risen to 98.56 this morning, anticipating a possible breakout above the declining trendline. The Cycles Model shows rising strength in to the weekend which may give USD a boost above the trendline.
Bitcoin has pulled back from yesterday’s all-time high at 126287.29 made yesterday. It may be too soon to call it a top, but the reversal was made in precise Cyclical time. Bitcoin is at a spike high, making it difficult to obtain any signals until the Intermediate support is crossed at 115299.00. Once the reversal is made, the Cycles Model suggests a decline to late November.