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.
8:00 am
Good Morning!
SPX futures have advanced to a morning high at 6917.00, approaching the Cycle Top resistance currently at 6961.40. Further resistance lies at 7000.00. Today is day 252 of the current Master Cycle, suggesting only a week may be left in this segment. Following this we may see a two-month decline. Meanwhile, the Fed may be adjusting their balance sheet to a new normal (much higher) level, suggesting inflation may be the pathway of least resistance. This will be viewed as being broadly supportive of risk assets. However, geopolitical events may put a dent in their plan. Meanwhile, food stamps are set to be paused on Nov. 1 because of the government shutdown.
Today’s options chain shows Max Pain at 6865.00. Long gamma gathers strength above 6895.00-6915.00, while short gamma lurks beneath 6840.00.
ZeroHedge reports, “… US futures march higher into today’s Fed and Mag7 earnings (GOOG, META, MSFT adding up to more than $9TN in market cap) on relentlessly positive AI news, optimism about trade and expectations of a cut from the Fed later.”
VIX futures have paused just beneath the 50-day Moving Average at 16.58 this morning. There may be a marginal probe lower to complete the declining fractal. A reappearance of trending strength next week may pull the VIX out of its basement funk.
TNX is hovering at the Cycle Bottom at 39.52. While Wave (E) appears complete, it ahs a tendency to be a rogue Wave. That being said, there is a possibility of a lower Master Cycle low at today’s Fed announcement (in Cycles overtime). The Cycles Model suggests both today and tomorrow are high volatility days, suggesting a strong reversal. Appetite for treasuries is waning…
ZeroHedge reports, “If yesterday’s 5Y auction was stellar, with solid demand across the board including a jump in foreign demand, then today’s sale of $44BN in 7Y paper, the week’s final coupon auction in an abbreviated schedule ahead of tomorrow’s Fed decision, was mediocre at best.”
USD futures are still hovering above the trendline and critical support at 99.24. The Cycles Model suggests today is a high volatility day, leaving open the possibility of a short-term decline to 97.50, a Fibonacci retracement level. The Cycles Model implies that the trend has changed to a positive one and may remain positive until the end of November.
Bitcoin slid beneath its 50-day Moving Average at 114277.00 and may be on a renewed sell signal. It may receive temporary support at the mid-Cycle level at 110955.00 for a while. However, the Cycles Model calls for a panic decline in early November, suggesting a much deeper low. A likely target may be the April 7 low at 74426.00.
Gold futures may have climbed back above the Cycle Top resistance at 4026.93 this morning. It is capable to challenging the trendline and its existing high at 4381.58. The Cycles Model calls for a series of panic rallies, possibly to 4500.0, during the next week or so.
The Agricultural Index continues its advance,. but may be due for a pullback in the next week or so. This is one sector to buy on the pullback, as the trend has become positive. China has resumed its purchase of soybeans, raising the price per bushel of soybeans above $11.00. In addition, there have been drought conditions in a majority of the 50 states, leaving slimmer food supplies.