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.
7:50 am
Good Morning!
After having overshot its 61.8% Fibonacci retracement level at 6810.41 SPX futures may now be testing that level. Yesterday’s rally appeared to be mostly short-covering, which may now be exhausted. Intermediate support and the trendline lie at 6731.13 while the 52-day Moving Average lies at 6670.00. The top view is that the decline may resume today, followed by the violation of the aforementioned supports. Should that happen, the next phase of the decline may last a month or more. Meanwhile, Wall Street labels the past two weeks as a “wobble” that can be ignored, calling for a Santa Rally to the end of the year. Whether a wobble or something more bearish, watch the trendline for support or failure.
Today’s options chain shows Max Pain at 6810.00. Long gamma may rise above 6830.00 while short gamma resides beneath 6780.00.
ZeroHedge reports, “US futures are weaker following the best day for the S&P500 in almost a month and the Nasdaq’s best day since late May. The market frontran the catalyst: late on Monday the Senate passed its funding bill, and the House is expected to vote on Weds, as it always eventually does, especially since it has Trump’s full support.”
VIX futures rose to 18.01 thus far this morning. VIX is due for a bounce. However, it may be hampered by overhead resistance at the mid-Cycle at 19.64. Clearing that resistance allows the VIX to resume its rally.
YNX has bounced above the 52-day Moving Average at 40.88 this morning. While acting positively, it may still decline beneath the 52-day over the next two weeks. Bond volatility is on its first uptick since May, making equities investors uneasy. Easing beneath the 52-day may ease investors’ trepidations. However, it may not last.
USD futures may be testing the Intermediate support at 98.90 this morning. The Cycles Model indicates the rally may resume in the next week. A breakout above the mid-cycle resistance at 100.17 may propel the USD to its Cycle Top at 104.24 by the end of the month.
Bitcoin may have started its next leg down. A possible Head & Shoulders formation awaits beneath the low at 98930.00. The Cycles Model suggests the current decline may continue to the end of November. Should the neckline be broken, the decline may resume about three weeks later.
Gold futures rose to 4152.00 this morning, lifting it solidly above its Cycle Top at 4098.00. The Cycles Model offers a rally to mid-December. The intended target is a little more obscure, with 4500.00 being the base case. A lot may depend on geopolitical events.