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.
11:10 am
SPX made an attempt to rise above the neckline at 6650.00, but the resistance was overwhelming, causing it to falter at the Fibonacci 38.2% retracement. The decline may gather strength as it plummets toward (or below) its intended target this weekend. Reality may finally be setting in.
ZeroHedge remarks, “Rearranging the Chairs
Tuesday was another down day for most markets as the US weekly ADP jobs report suggested the labor backdrop is weakening and housing starts sagged. As the FT puts it, ‘Oracle’s astonishing $300bn OpenAI deal is now valued at minus $60bn.’”
7:50 am
Good Morning!
SPX futures are back-testing the Head & Shoulders neckline near 6650.00 as I write this morning. SPX broke through the neckline (thin ice) yesterday and the immediate reaction is to attempt to regain “higher ground.” But the deed was done. The Cycles Model calls for deteriorating conditions for the SPX up to monthly options expiration on Friday, resulting in a possible panic decline. While smart money has been hedging, retail, commercials and hedge funds still find themselves uncomfortably long. Even with the Head & Shoulders formation, most analysts still see the decline as a “minor” correction, due to the strength and persistence of the previous rally
Today’s options chain shows Max Pain at 6655.00. Long gamma may prevail above 6680.00 while short gamma strengthens beneath 6635.00. Beneath 6600 lies a “gamma trap” for speculators.
ZeroHedge reports, “After 4 days of steep declines, futures are finally higher ahead of Nvidia earnings, with AI bulls hoping for strong numbers to provide respite from the market selloff.”
VIX futures have “:stepped back” from yesterday’s high as it digests its gains. VIX rose above 25.00 yesterday, attracting the attention of analysts and prognosticators, parsing out the meaning of this move. The Cycles Model indicates a buildup of momentum going into and beyond equities options expiration. Today’s VIX options expiration shows a “call wall” at 25.00, indicating increased volatility above that level.
TNX is consolidating after testing the 52-day Moving Average at 40.81 yesterday. It may be ready to break out above the sideways formation as strength in the new trend builds this week. The next resistance is the mid-Cycle level at 42.58, which could conceivably be reached by the weekend.
USD futures are testing the 200-0day Moving Average at 99.92 this morning, making life difficult for dollar shorts. The Cycles Model indicates the massive short holdings may burst through resistance as shorts run for cover this weekend.
Bitcoin may have made an early Master Cycle low yesterday. The normal routine would be to rise up to test the Head & Shoulders neckline at 98932.00, clearing out the weaker hands (shorts) before its final thrust to the implied target. However, the declining fractal may not be complete. There is a possibility of a new low near 86000.00 possible this week.
BKX is on a bounce that may take it back to the 52-day Moving Average at 149.91. It appears that attempts are being made to keep BKX from selling off this week. The Cycles Model infers that the powers-that-be may succeed temporarily, but the Cycle is getting very top heavy, while Wall Street denies any emergency. While it is difficult to short the banks, indications are that a disaster may strike by mid-December.
ZeroHedge observes, “The alarms are getting even louder each week. It has become exceedingly clear that the U.S. economy has entered a crisis that is similar to what we experienced in 2008 and 2009, and a lot of people are really starting to freak out. For those that cannot see the stunning parallels between the Great Recession and what we are going through now, I don’t know what to say to them. ”