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 6909.00 this morning thus far, as a reversal from Friday’s Master Cycle high may be in the making. Should that be so, a decline may begin that lasts through January. The Ending Diagonal structure suggests a bottom target may be near the April 7 low at 4835.64. Initial support lies near 6900.00, then 6800.00, where aggressive positions may be taken. Intermediate support lies at 6795.00, beneath which a confirmed sell signal may be given. The 52-day Moving Average lies at 6785.00, offering further confirmation of a sell signal that may be universally recognized by traders. At a minimum, aggressive sell signals may offer an opportunity to reduce long exposure (sell) while profits remain.
Today’s options chain shows Max Pain at 6925.00. Long gamma may begin above 6930.00 while short gamma rules beneath 6900.00. Sentiment is overwhelmingly bullish with call contracts above 6950.00 taking the lion’s share.
ZeroHedge reports, “Stocks are extending their modest losses from their pre-Christmas record as another shortened trading week starts. As late last week, much of the market action is in precious metals, with silver first smashing through $80 for the first time before sliding…”
VIX futures have risen from Wednesday’s miserable low to a morning high at 14.90. The diagonal trendline near 16.00 offers the first level above which one may find a buy signal. Further confirmation may lie above the 52-day Moving Average at 18.00. A breakout above that level may be recognized by the trading community. The Cycles Model suggests a possible calm but rising VIX for the balance of the week. VIX may erupt in strength during the week of January 5.
The ;December 31 options chain shows Max Pain at 18.00. Short gamma rules between 13.50 and 17.00, where the majority of options players are. Long gamma begins above 19.00 and extends with some conviction to 30.00.
TNX futures made a morning low at 41.01, probing toward the 52-day Moving Average at 40.90 and a potential Master Cycle low. The low may go unnoticed as the markets may remain relatively calm this week. However, the week of January 5 offers some excitement as positive trending strength begins in the New Year.
USD futures are hovering above their Cycle Bottom at 96.79 as the current Master Cycle wraps up this week. Odds are better-than-even of making a low near that level by the end of the week. The Cycles Model suggests some potentially explosive moves after the year-end. Talk of the dollar’s demise may be premature.
Bitcoin rose toward its 52-day Moving Average at 91001.00 this morning, but fell short of its target, declining beneath Intermediate support at 89266.87 and offering a confirmed sell signal. The Cycles Model suggests a decline into the first week of February where its Head & Shoulders target may be met or exceeded. Bitcoin offers a view of international liquidity. As you may see, efforts have been made to maintain liquidity to the year end. That may be about to end.
Silver futures reached a weekend high at 82.61 before selling off rapidly to a low of 70.23. The Cycles Model had anticipated this, giving warning as much as two weeks ago of a sudden reversal. There is no catalyst for this sell-off, or at least a catalyst has not been found as yet. Dynamic Cycle often run until utter exhaustion as liquidity thins.