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.
3:25 pm
SPX may have made its final probe to a new all-time high today on day 274 of the Master Cycle. Master Cycles last an average of 258 days. Since they are behavioral and not mathematical, there can be some variance in the structure and time. For example, the previous high at 6945.77 occurred on day 263, giving it a high probability of being the Master Cycle high at that time. That is why my logic this morning suggested that the SPX had already started a new Master Cycle that terminates near the end of January. However, the leap in price alerted me that things were coming to a head a lot faster than I had proposed.
Today’s new all-time high alerted me to the fact that we might still be in the old Master Cycle. The upper limit of a “stretched” Master Cycle is 275 days. So, it is entirely possible that today or tomorrow may be the “corrected” Master Cycle and all-time high.
8:15 am
Good Morning!
SPX futures edged lower to 6887.50 this morning before coming back to 6900.00 this morning. It remains within a 78.6% Fibonacci zone, suggesting that the spike high may be finished. An escape above 6920.38 may give a month-long rally. However, a decline beneath 6857.00 gives us an early warning, while a decline beneath 6825.00 may turn into a month-long rout. Yesterday was an exceptionally strong day, but it could not make a new high. While getting the bulls excited, no real progress higher was made.
Today’s options chain shows Max Pain at 6910.00. Long gamma may begin above 6930.00 while short gamma lies beneath 6900.00.
ZeroHedge reports, “US equity futures are flat with small caps underperforming as geopolitics dominate headlines, including aftershocks from the Maduro seizure and a potential US/EU deal that provides a security guarantee for Ukraine potentially with American soldiers maintaining a presence in Ukraine.”
VIX futures are consolidating beneath the trendline at 15.20. A breakout may introduce a buy signal for the VIX. Should the breakout occur, the VIX may continue its rally to the end of January, per the Cycles Model.
The January 7 options chain shows Max Pain at 16.00. Short gamma resided between 14.00 and 16.00. Long gamma begins above 17.00 and may extend to 30.00.
The US 10-year US Bond Yield futures rose to 41.93 this morning, while TNX continues to consolidate beneath the Head & Shoulders neckline at 42.05. Bond volatility has remained soggy for the past 4 months. However, potential breakout may be imminent as the Cycles Model highlights a surge in trending strength today. Should this occur, the Head & Shoulders structure allows TNX to rally to its Cycle Top in the next two weeks.
USD may be consolidating beneath a Possible Master Cycle high made yesterday. There may be a brief pullback before going higher.