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.
3:04 pm
SPX is toying with the idea of a Key Reversal…a decline beneath 6810.00 would do the trick. In addition, it would offer us an aggressive sell signal. Further confirmation may come with a decline beneath the 52-day Moving Average at 6740.91. The ultimate fake-out would be to close flat or slightly higher today, leaving the dirty work to be done in the overnight market.
8:00 am
Good Morning!
SPX futures consolidated beneath yesterday’s late afternoon high at 6862.42. It did not reach the proposed target at 6875.00 – 6880.00. This morning’s action may confirm the high or allow a brief probe higher. The surface of the market remains calm. However, there are swift undercurrents that may boil over at any time. Yesterday may have offered the swing high for the current Master Cycle. The Cycles Model suggests a possible three-week decline may be imminent.
Today’s options chain shows a much contested Max Pain level at 6850.00. Long gamma may be found above 6900.00 while short gamma is strongest beneath 6800.00.
ZeroHedge reports, “US equity futures rise, trading less than a percent away from a new record high amid signs of a leadership rotation with Big Tech not leading the bounce this time.”
VIX futures are consolidating near yesterday’s low. It appears sleepy, but may burst into action at any time. The Cycles Model informs us of the possibility of a surge of strength that may be imminent. The immediate target may be the April high. However, a higher target may be implied.
The December 10 options chain shows Max Pain at 18.00. Short gamma appears to be dwindling from 15.00-17.00. Long gamma breaks out strongly at 20.00.
TNX broke above the 52-day Moving Average at 42.79 this morning, creating a buy signal (a sell signal for the UST). While the breakout may remain unrecognized, the trendline lies near 41.30. The Cycles Model offers today as a day of strength, which may propel it to, or above, the trendline, That breakout may gain recognition that all is not well for bonds.
USD futures made a new Master Cycle low this morning. A reversal above the 52-day Moving Average at 99.19 reinforces the existing buy signal. The 200-day Moving Average is at 99.53, giving extra confirmation of the uptrend. USD shorts are nervously sitting on a ticking time bomb that may erupt at any time. The new Master Cycle may take USD higher through the end of the year.
Bitcoin extended the Master Cycle to a new high at 94089.00 before pulling back. It sits above the Cycle Bottom support at 92195.00. A drop beneath that level reiterates the sell signal. The new Master Cycle may be short but strong, as the Head & Shoulders formation has been triggered and must be completed. Bitcoin is a good indicator of international currency flows. A person my buy bitcoin in London and sell it in New York. Bitcoin has been in decline since China outlawed its use. Now Europe may be on the verge of implementing capital controls, which may put a nail in the coffin for bitcoin.
The Japanese Yen has risen to 64.70 this morning, exceeding its prior high. It is on a buy signal since early this week. Crossing above Intermediate resistance at 64.82 and the 52-day Moving average at 65.47 may strengthen the new trend as it may reach its Cycle Top at 70.95 by the end of the year. Underlying this, the Japanese 10-year bond yield, which topped out near 1.10% in July 2024 is now approaching 2% in a parabolic move. While the Bank of Japan claims QE, a break above 2% signals QT, which starts draining liquidity as it repatriates back to Japan. The offshoot is that the Yen has reversed and starting to climb, causing pain in the Yen carry trade in the US.