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
8:30 am
Good Morning!
SPX futures rose to a morning high at 6923.40, then eased down, remaining above yesterday’s intraday high. The Cycles Model allows this, although this morning’s probe may be the last gasp at recovering the ATH. The prior six days were preparation for the next fractal, the largest of the series. At a minimum, the SPX may decline to its November low at 6521.92. Additional possible targets for this declining fractal may be the mid-Cycle support at 6456.03 or the 1987 trendline at 6030.00-6050.00. Nothing can be ruled out at this time, although most analysts consider this decline a minor pullback to be bought. A decline beneath 6800.00 sets this decline in motion. There is no room for error. Investor and hedge fund risk taking are at their upper limits.
Today’s options chain shows Max Pain at 6870.00, where the smallest options payout occurs. Long gamma resides above 6900.00 while short gamma strengthens beneath 6850.00.
ZeroHedge reports, “US equity futures and global stocks are sharply higher as the S&P again marches toward a new ATH while the latest vol spike subsides, after Trump’s tariff pivot eased geopolitical fears, though Greenland and other flashpoints mean the optimistic mood is laced with some caution.”
The pre-market VIX declined further, to 15.88, near the trendline. This has been an unusual formation, in that the impulse took only one-third of the rise from the bottom, while the correction overpowered it, rising to 20.99. It did the job, but it was ugly. The Cycles Model suggests the correction may be complete, or nearly so, allowing the rally to reassert itself.
The January 28 options chain shows Max Pain at 18.00. Short gamma occupies the chain between 15.00 and 17.00. Long gamma begins at 19.00 and may stretch to 40.00. Options sentiment is changing.
The US 10-year bond yield futures declined to the mid-Cycle support at 42.24 this morning, suggesting a short decline to support before resuming its rally. Trending strength may resume today or tomorrow, propelling TNX significantly higher. The current Master Cycle runs to mid-February, so a probe to the Cycle Top at 45.25 may be the next target.