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.
6:00 pm
I am sharing the 2-hour (trading) chart to illustrate the reasons why the SPX may have made its all-time high on Wednesday, January 7. While the December 26 high at 6945.77 fulfilled the normal time span for a Master Cycle of an average 258 days, that high was accomplished in 263 days, a normal variance. Having accomplished that, it seemed to be ready to decline. But…recall that the market had drawn a line in the sand at 6825.00, beneath which a sell signal may be given. The bounce at 6824.31 on January 2 signaled that the subsequent bounce needed to retest the highs. In the meantime. there appeared an ending Diagonal formation that defined the highs and the lows of its boundaries. That is why on Monday I announced that it could potentially rally to the vicinity of 6975.00. The Diagonal formation is a behavioral construct that defines
12:42 pm
The Agricultural Index is coming out of its Master Cycle low of January 2 having broken through Intermediate resistance at 358.99 and challenging the 52-day Moving average at 360.35. The Cycles Model projects near-term strength that may allow a breakout above widely recognized critical resistance. In fact, the Cycles Model indicates the probability of a continued rally to the end of March, as farmers are retiring their land. No crops for significant swaths of arable farmland. The specter of bare shelves at the supermarket is becoming more real.
ZeroHedge observes, “How deep is the farm crisis? Adios to acreage.
In November 2025, Alex Harrell, among the most highly reputed producers in the U.S., dropped an old-school grading scale, A to F, across his 6,000-acre operation and slashed almost half his ground, notifying 12 landlords in a three-week window. “I can’t speak to the rest of the country, but around here, generational growers are either cutting back, quitting, falling into Chapter 12, or grasping at straws.”
8:00 am
SPX futures dipped down to 6893.70 in the overnight session thus far. Currently it is near 6900.00. Round number 6900.00 is the first support level, then Intermediate support at 6821.00 offers the first sell signal followed by the 52-day Moving Average at 6813.00. SPX has been stuck at the range highs since October. Despite making spike highs yesterday, both the DJIA and NDX gave back all the gains by the end of the day. This coordinated move does not bode well for equities.
Today’s options chain shows Max Pain at 6930.00. Long gamma may begin above 6950.00 while short gamma resides beneath 6900.00.
ZeroHedge reports, “US futures are lower as New Year optimism gives way to jitters about the economy and geopolitics with attention turning to tomorrow’s NFP report. Traders are also trying to make sense of Trump’s latest edicts on defense and corporate landlords, with a vortex of headlines making things feel more unpredictable than usual.”
VIX futures broke out above the trendline at 15.20 to a morning high at 15.81, giving its first buy signal of the year. Further confirmation lies above the 52-day Moving Average at 17.25. VIX appears to be powering up and the Cycles Model infers trending strength may be on the rise with possible upside panics starting next week. While VIX has emerged from the basement, downside risk may be low. Meanwhile any stumble at the SPX range high may spark a strong reaction. The first target may be the April 7 high at 60.13. The second target may be the August 5, 2024 high at 65.73. That may be amended higher as the new Master Cycle grows legs.
The January 14 options chain shows Max Pain at 16.00. Dealers hold the majority of puts beneath that, with high concentration at 15.00. There is a growing number of calls above 19.00, but the conviction isn’t there, yet.
TNX bounced from Intermediate support at 41.27 in the overnight session. The month-long wind-up under the Head & Shoulders neckline may be ready to be sprung in a breakout towards the Cycle Top at 46.34.
USD futures are racing the clock for a breakout before the Master Cycle ends. It has risen aboe Intermediate resistance at 98.70 and may challenge the 52-day Moving Average at 99.85 in the next few days. Should it reach escape velocity, the Cycle Top at 100.67 may be in view.
Japanese Yen futures may have started their final descent to its Master Cycle low near the Cycle Bottom at 63.09. The Bank of japan may be considering raising its key interest rate again, to curb domestic inflation. The Bank’s next Monetary Policy Meeting (MPM) will be January 23-24 with results likely to be released on January 26…the next Cycle Pivot date.
Bitcoin stretched its Master Cycle to January 5 at 94804.00 followed by a strong reversal. It is hovering above its 52-day Moving Average at 89294.00. A sell signal lies beneath that level. The Cycles Model reports that today may be an especially strong down day. The anticipated decline may last to the week of February 2. The Head & Shoulders formation remains active.
Silver futures have declined beneath the upper trendline near 75.00 this morning. There is a warning of $7.7 billion of silver will enter the market over the next week as the Broad Commodity Index rebalances. Several significant banks had shorted silver in anticipation of the rebalancing, but had done so too soon, causing a meltdown on the New Year’s weekend due to a margin call as silver rocketed above 80.00. The “sure thing” backfired, causing massive losses. In the aftermath, the Cycles Model posits yet another decline to the 52-day Moving Average at 63.40, or possibly lower.
BKX made its all-time high on January 6 and has fallen beneath its Cycle Top support/resistance at 171.41. It is on a Cyclical sell signal that may be considered aggressive by some. However, those “significant” banks caught in the silver debacle will have to report their trading losses from the silver market. In addition, should TNX break out, they may have to indicate dimming future earnings prospects as the bond market may not be as stable as it seems. Rising interest rates cause valuation losses in a bond portfolio.