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.
8:00 am
Good Morning!
SPX futures declined to 6826.50, challenging the demarcation that may announce the resumption of the larger decline. Should that be so, the next level that may produce a bounce may be the 52-day Moving Average at 6754.77. The Cycles Model infers increasing volatility today with a possible panic decline tomorrow. The Head & Shoulders formation, once activated, defines the potential minimum decline. Additionally, Ending Diagonal patterns are often retraced to their origins, indicating a potential decline to the April 7 low at 4835.00, a potential 30% decline from the all-time high.
Today’s options chain shows Max Pai at 6855.00. Long gamma may begin above 6860.00. Short gamma appears beneath 6825.00.
ZeroHedge reports, “US equity futures are flat ahead of a Fed meeting where a rate cut is assured (the only question is whether it will be hawkish or dovish) and Oracle results later.”
VIX futures rose to 17.57, above the trendline near 16.50. It is on an aggressive buy signal, where the riskiest, but most lucrative positions may be made. To the average investor, VIX appears to be very sleepy. The buy signal is confirmed above the 52-day Moving Average at 18.40, where most professional hedging begins. The average investors may wait for a breakout above 28.27 before stepping over to buy protection. A potential target for a bullish move may be the April 7 high, at 60.13. A more likely target may be the August 2024 high at 65.73.
Today is options expiration for the VIX, so many positions are closing out. The December 17 (monthly) options chain shows Max Pain at 19.50. Short gamma has the majority beneath 19.00. Long gamma picks up above 20.00. The majority of options investors are short. Ms. Market often proves the majority wrong.
The 10-year Treasury Bond yield futures rose to 42.12, while the cash market elevated to 42.04. This may form a neckline of a Head & Shoulders formation with a minimum target at 44.51. Note the Cycle Top resistance is at 45.50. There may be a pullback earlier today before proceeding to break through the neckline. However, bond volatility is starting to move higher. The Cycles Model offers a triple whammy of strength over the next two weeks that may become chaotic. A hawkish rate cut suggests there may be no further cuts for the next three FOMC meetings in 2026, after which Powell steps down. Investors seem to be anchored to the notion of three mid-Cycle rate cuts, signifying a potential loss of confidence.
USD futures are creeping higher, along the 52-day Moving Average at 99.15 and has moved above the mid-Cycle support at 99.01. A clear buy signal may be offered above the 200-day and Intermediate resistance at 99.49. The Cycles Model suggests a powerful move higher in the making, with extra strength beginning this weekend. The USD may continue its upward path through the first week of January.
Bitcoin has moved beneath Intermediate resistance at 92997.00, creating a potential sell signal. Its retracement high at 94617.00 was brief and vexatious, as a sell signal had been previously given. However, volume has dropped off considerably, suggesting that confidence was waning.
While gold continues to plod along beneath its Cycle Top resistance, silver futures have gone parabolic. This morning’s high is 62.13, suggesting the potential target at 65.00 may be met or exceeded. There is an approximate week left in this Cycle. Many speculators may attempt to go long, to their ultimate dismay, as silver may pull back as much as 50%.
ZeroHedge opines, “The Silver Slingshot
For the last 18 months, the Gold-Silver Ratio (GSR) has been the “widow-maker” for precious metals bulls. It has tested the patience of anyone paying attention to hard assets. While gold spent late 2024 and early 2025 shattering records and grabbing headlines, silver—the bipolar cousin that is half monetary metal, half industrial commodity—lagged behind.”
The Japanese Yen slid beneath the Cycle Bottom support at 63.99. The perceived weakness may not last, as the yen is due for a shot of strength by the weekend. The BOJ may make its statement on monetary policy on December 19. The Cycles Model suggests turmoil may result through the first week of January following that statement.
West Texas Crude oil declined to 57.66 this morning. The neckline of a Head & Shoulders formation resides near the Cycle Bottom at 56.88. Should the decline go beneath it, the Head & Shoulders formation may be activated. The Cycles Model suggests the decline may continue through the end of the year.