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.
7:45 am
Good Morning!
SPX futures reached a morning high at 6877.30, within the target range announced earlier this week. Should the fractal high imitate its predecessors, it may be complete this morning. A decline beneath 6810.00 instigates an aggressive sell signal. The Sell signal may be confirmed beneath Intermediate support at 6774.80 with further confirmation beneath the 52-day Moving Average at 6740.98. The possibility of a Key Reversal arises with a new high today followed by a decline beneath 6827.00. Equities are skating on increasingly thin ice, with the Yen and domestic yields rising. The Cycles Model suggests the ice may break at any time. Markets seem to be holding out until the FOMC announcement on December 10, but things may begin to unravel prior to that event.
Today’s options chain shows Max Pain at 6840.00 – 6845.00. Long gamma has inserted itself at 6850.00 while short gamma rules beneath 6825.00.
ZeroHedge remarks, “Wall Street’s financial engineers thought they had found yet another way to turn financial markets into casinos.
The gimmick this time is with 3x, 4x, and even 5x leveraged ETFs tied to individual stocks and cryptocurrencies.
But, as RealInvestmentAdvice.com reports, the SEC just ruled against these new proposals, apparently drawing the line at 2x leverage as the rules state.”
ZeroHedge reports, “Stock futures rise as investors look ahead to Friday’s release of the Fed’s preferred inflation gauge, the core PCE, a reading that may help shape next week’s rate outlook as the BOJ charts its own divergent policy course.”
VIX futures declined to 15.55 this morning, setting up a high probability mid-Cycle reversal from a low point near 15.00. There is a “shadow Cycle” which appears to target today or early next week. Fractals are self-similar, pointing to a possible outcome similar to the March 22 to April 7 spike. The Cycles Model anticipates a spike in VIX that may be larger than the one this spring.
The December 10 options chain shows Max Pain at 17.00. Short gamma has narrowed down to 15.00 – 16.00. Long gamma now begins at 18.00 and is well populated to 29.00.
The US 10-year Bond yield is moving higher with strength after overcoming the 52-day Moving Average at 40.79, reiterating its buy signal. While many technicians realize the significance of being above the 52-day, the majority still calculate with a ruler, looking for the imminent breakout above the trendline. By that time major moves will have begun.
ZeroHedge reports, “First things first, this is September data… so horribly lagged/stale… but, it’s all we have, so let’s dive in.
The Fed’s favorite inflation indicator – Core PCE – rose 0.2% MoM (as expected), which leave it up 2.8% YoY (as expected), slightly lower than August +2.9%…”
Bitcoin has reversed from its corrective high yesterday at 94089.00 and plummeted below 90000.00 before a bounce. This registers a completion of the “Shadow Cycle” previously mentioned in the VIX. Since Bitcoin may be viewed as an international liquidity proxy, it may be warning of an imminent collapse in liquidity world-wide.
USD has tested both the mid-Cycle resistance at 99.11 an d the 52-day Moving Average at 99.15. A (key) reversal may be at hand as the USD moves out of its Master Cycle low.