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.
7:30 am
Good Morning!
SPX futures rose to the trendline at 6780.00 over the weekend, then gave it all back this morning. It is currently consolidating near Friday’s close. The reason for Friday’s wild swing may have been negative gamma, which becomes a factor beneath 6730.00 today. Keep in mind that the 52-day Moving Average lies at 6694.00, beneath which sentiment turns very bearish. The Cycles Model suggests a rise in volatility toward monthly options expiration on Friday. Puts and calls are running neck-and-neck in what may be an explosive trading day.
Today’s options chain shows Max Pain at 6760.00. Long gamma dominates above 6800.00 while short gamma becomes strong beneath 6730.00.
ZeroHedge reports, “US equity futures are slightly higher led by Tech, but well off overnight highs, while stocks around global markets slide. As of 8:00am ET, S&P and Nasdaq futures are up 0.1%, having previously been as much as 0.6% higher, after both gauges closed above their 50-day moving averages on Friday, a key support level.”
VIX futures are consolidating above the mid-Cycle support at 19.70 this morning. VIX is on a confirmed buy signal. The Cycles Model shows increasing volatility up to equities options expiration on Friday and lingering into next week.
The November 19 options chain shows Max Pain at 21.00. Short gamma is very heavy between 15.00 and 20.00. Long gamma begins at 22.00 and reveals institutional presence up to 100.00.
TNX is behaving correctively and may may revisit critical support in a Trading Cycle low near 40.70 in the next day or two. Subsequently, trending strength may build as the month of November winds up. Bond volatility may erupt in early December as the current Master Cyclewinds up by mid-month.
USD futures have risen above the mid-Cycle support/resistance at 99.44 with the 200-day Moving Average just above it. USD is coming out of a possible Trading Cycle low with increasing strength of conviction. A breakout above the 200-day may follow with the Cycle Top acting as possible resistance by the month end.
Bitcoin may be bouncing from Sunday’s low at 93006.00. Should that be the case, a probe to the neckline at 98932.00 may follow. The Cycle Bottom lies just above the neckline as a secondary resistance, which may terminate the current Master Cycle in about a week’s time. A further month of decline may follow.
BKX remains under the 52-day Moving Average and on a sell signal. This proxy for liquidity has been supported, but may not last as liquidity needs will grow into the year-end. Approximately 5 weeks of decline are built into the Cycles Model.