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
1:10 pm
SPX rebounded as anticipated and is due for a reversal in the next hour or so. An aggressive sell signal may be had beneath 6818.91 while confirmation is beneath the 52-day Moving Average at 6886.86.
RealInvestmentAdvice considers, “For nearly two years, markets were driven by the same speculative narrative that “this time is different.” Bitcoin, precious metals, and AI-linked equities rose not only because of robust fundamentals, but also because investors clung to powerful narratives about inflation, disruption, and monetary collapse. Those speculative narratives are not only seductive but also contribute to investment behaviors that obscure reality.”
8:00 am
Good Morning!
SPX futures declined to 6901.00 where it found round number support and is capable of a final probe higher to 6970.00-6980.00. This may be completed during the morning hours. The strong retracement is due to the influence of the DJIA making new all-time high on Friday. The Industrials sparked a short squeeze that may be due to run out this morning. The NDX, on the other hand, left its all-time high on October 29 with a near miss on January 28, where the SPX made its all-time high. This dispersion has caused chaos in the markets, which may resolve in the next couple of days. However, 0DTE options can change the direction of the market on a dime.
Today’s options chain shows Max Pain at 6910.00. Long gamma may begin above 6925.00 while sort gamma strengthens beneath 6890.00.
ZeroHedge reports, “S&P futures are unchanged, erasing all overnight losses, extending last week’s choppy price action focused on AI repercussions; Nasdaq 100 futures underperform slightly ahead of an important week that has both the January jobs and CPI report on deck…”
The premarket VIX rose to 19.20 over the weekend before easing back somewhat. It remains positive this morning, suggesting unease with the markets. The Cycles Model suggests the VIX may run hot, above the Cycle Top at 24.53, for the rest of the month.
Wednesday’s options chain shows short gamma residing beneath 17.00 while long gamma is strengthening above 18.00.
TNX is rising from its Head & Shoulders neckline this morning as it resumes its uptrend. It may be due to reach the Cycle Top resistance at 45.07 in the next two weeks. The long-term target may be considerably higher.
ZeroHedge observes, “Treasury yields hit session highs shortly after midnight ET, when Bloomberg reported that Chinese regulators had advised financial institutions to rein in their holdings of US Treasuries, citing concerns over concentration risks and market volatility.
Citing anonymous “people familiar with the matter” Bloonberg added that officials urged banks to limit purchases of US government bonds and instructed those with high exposure to pare down their positions. The directive doesn’t apply to China’s state holdings of US Treasuries.”
USD is now in correction to its Cycle Bottom at 96.72. It may linger between the Cycle Bottom and the cluster of overhead resistance for the next week, building enough strength over the week to break out above 98.43 by this weekend or shortly thereafter.
Bitcoin fell back from its reaction high at 71546.00 over the weekend and may be likely to retest the low at 60069.72 before going higher. While long term investors may start to accumulate shares, it may be too chaotic to be tradable in the short run.
Silver rose to 82.77 over the weekend and may be testing Intermediate resistance at 84.62 or its Cycle Top resistance at 87.95. The correction may not be over, leaving the possibility of testing trendline support at 60.00 before it is over. The mid-Cycle support is at 50.89. The Cycles Model offers little drama in the next two months, suggesting a possible sideways Triangle formation, which consumes time. The long-term rise is not over, but the short term is not clear, yet.