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.
8:45 am
SPX futures rose to a morning high at 6887.50 thus far, taking back yesterday’s losses. The rally is still intact, as previously discussed. The Master Cycle may be on its last probe to new all-time highs, offering only as couple more days of new heights. The Cycles Model shows resistance at 6984.06 – 7000.00, indicating a possible peak on Tuesday. Some analysts claim that the rally may end in a parabolic blow-off. However, a “hawkish Powell”, the Mag7 reversal and strained liquidity points to a whimper at the top once 7000.00 is reached.
Today’s options chain shows Max Pain at 6830.00. Long gamma strengthens above 6850.00 with a wall of calls at 6900.00 while short gamma dominates beneath 6800.00.
ZeroHedge reports, “US equity futures rebound from the Thursday drop, led by Mag 7. As of 8:00am ET, S&P futures are 0.8% higher and Nasdaq futures gain 1.2%, on pace for sixth and seventh straight monthly gains respectively, with all Mag 7 names higher premarket…”
VIX futures are consolidating beneath the 52-day Moving Average at 16.65 this morning. A Trading Cycle (swing) low may have been made on Monday, October 27,uggesting the VIX may have reached bottom. The Cycles Model shows a burst of trending strength early next week, and extending into early November.
The November 5 options chain shows Max Pain at 16.00. Short gamma rides almost exclusively at 15.00 while long gamma becomes established above 17.00. Institutional presence may be indicated above 20.00.
TNX is consolidating beneath the 52-day Moving Average at 41.08. The declining trend may be broken above that level. Bond volatility remains calm, while the yields rise. However, the Cycles Model notes a disturbance (breakout?) early next week that may upset the apple cart.
The Banking Index has slipped beneath its 50-day Moving Average at 149.60, confirming the existing sell signal and an end to the Master Cycle. Should that be so, the new Master Cycle may take the BKX down until late December, targeting the April 7 low. A double panic Cycle may develop early next week to kick the hinges off the trap door.
Bitcoin is bouncing off yesterday’s Trading Cycle low at 106319.00 to back-test mid-Cycle resistance at 111093.00 over the next few days. The possibility of a testing of the 52-day Moving Average at 114109.00 is possible next week. However, a triply-indicated panic Cycle may arise at the end of next week, with an ensuing target beneath 100000.00.
Gold futures are trading back above 4000.00. The pullback has taken much of the backwardation in gold off the table for now. Institutional investors have held their positions during the washout while Commercial traders have gone neutral with a finger on the sell button. It is the retail investors that are coming back with money flows to gold ETFs going positive yesterday. The Cycles Model suggests inflows may rise next week as confidence grows. The key question is, will gold make new highs? The outcome may affect gold’s path to the end of the year.
The USD may now be testing the mid-Cycle resistance at 99.86. Should it break through, the way may become clear to the Cycle Top resistance at 105.23. The Cycles Model remains calm for the next week, but a subsequent panic event may boost the USD out of the basement.