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.
12:54 pm
The Banking Index has bounced at its mid-Cycle support at 173.03 this morning. The bounce may only last a couple of days, with the decline resuming next week. Volatility may pick up during October, with the current Master Cycle coming due at the end of the monthll
8:30 am
Good Morning!
I have a meeting this morning. More details may arrive later.
SPX futures declined to 7647.50, possibly testing the 52-day Moving Average at 7625.42. The pullback may be over this morning with the reversal taking the SPX higher. The Cycle Top resistance is at 7973.06.
11:00 am
SPX may have made its low this morning at 7665.49, but remain beneath Intermediate support/resistance at 7689.52. A probe above 7690.00 lets us know the reversal higher may be underway…
VIX rose above the 52-day Moving Average at 16.09, but may have slipped beneath that support. The Cycles Model indicates that the decline may resume to the lower trenline beneath 13.00.
The US 10-year Bond Yield has continued its rally above the nckline of a Head & Shoulders formation. The minimal target may be reached in only two weeks. Should the H&S formation remain active, there may be a brief retest of the necline before resuming its advance. However, the next two weeks show trending strength consistent with a possible panic rally.
ZeroHedge considers, “With ‘hard’ economic data still somewhat muted, expectations were for a modest retracement in US PMIs from recently optimistic levels in preliminary September data.
Instead, the ‘soft’ survey data soared:
- Flash US Services PMI Business Activity Index: 58.7 vs 55.8 exp (August: 56.5). 59-month high.
- Flash US Manufacturing PMI: 57.0 vs 53.7 exp (August: 53.9). 52-month high.”
The US Dollar Index continues its rally toward the neckline of its Head & Shoulders formation at 101.80. The current Mster Cycle may continue higher until the week of October 12, allowing the ability to rise above the neckline. The Dollar shorts are being squeezed in this Cycle and short covering may propel the USD considerably above the neckline.
Crude oil advanced aggresively to 96.46 this morning, reflecting the return of trending strength. The Cycles Model suggests a possible panic may visit the oil patch this weekend with more to come in October. Note the potential Head & Shoulders formation directly above. While this formation is in a unique location, we must treat thisstructure as valid.
ZeroHedge remarks, “It was just this month which saw the Iran conflict spill over into a renewed fight between the Saudi coalition and Yemen’s Houthi rebels. Now Iran is threatening to expand the fight further, even into the Indian Ocean.”
Gold made a morning low at 4244.45, remaining above the September 14 Master Cycle low. Should it remain above that low, we may treat today’s action as a retest of the Cycle low, allowing the rally to re-form. A probe above the 52-day Moving Average at 4293.81 offers a potential buy signal, which may be confirmed when Gold rises above Intermediate resistance at 4408.97. A further rally above the mid-Cycle resistance at 4550.75 leaves the possibility of targeting the cycle top at 5241.14.
The Ag Index is testing the September 14 Master Cycle low. Once above theIntermediate resistnace at 423.98, the rally may resume. The buy signal may be confirmed above the Cycle Top resistance at 730.75.