The Practical Investor

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.

7:45 am

Good Morning!

SPX futures took a deep dive to test Intermediate support at 6718.46 in the overnight market, then bounced in an attempt to recover its losses.  Should the bounce continue, SPX may rally to a new all time high near the Cycle Top at 7014.49.  A failure to rally further may propel the SPX to the trendline at 6710.00-6720.00.  Beneath that lies the 52-day Moving Average at 6646.52 and a sell signal.

Today’s options chain shows Max Pain near 6800.00.  Long gamma rules above 6825.00 while short gamma prevails beneath 6750.00.

ZeroHedge reports, “Welcome to day 36 of the government shutdown which officially makes it the longest shut down in history. Futures are trading moderately lower, following weaker Asian and European sessions, but well off session lows as Japan retraced nearly 50% of its losses during the session.”

VIX futures rose to 20.02 this morning, surpassing the mid-Cycle resistance at 19.58.  While the SPX sell-off continues, the VIX remains quite subdued.  That may indicate the SPX has more potential upside this week.  Should that happen, VIX may probe back beneath the 52-day Moving Average at 16.76 by the weekend.  That scenario may lead to possibly explosive activity early next week.

Today is options expiration and out-of-the-money trades are being closed out.  The November 12 options chain shows short gamma ranging between 16.00 and 18.00.  Long gamma rules above 20.00.

TNX continues to challenge the 52-day Moving Average at 40.98, but hasn’t broken out of its consolidation.  The Cycles Model infers today to be a high energy day.  Should TNX make a clean break above the 52-day and the consolidation, we may see rising rates through the better part of December.  However, a break down may switch to lower rates for the same period.

ZeroHedge latest release, “Superficially, there were no surprises in the quantitative aspects of this morning’s Treasury refunding announcement: as previewed earlier, the Treasury just announced a total quarterly refunding size of $125 billion, just as expected…”

USD futures continue their rally to the 200-day Moving Average at 100.35, where it may meet some resistance.  Trending strength is building, however.  A show of strength may help the USD move higher through the weekend.

Bitcoin has bounced from the Cycle Bottom at 99824.73 this morning as it consolidates and digests its losses.  The Cycles Model notes a buildup of trending strength over the weekend and early next week, possibly indicating further losses.  The end of the current Master Cycle may be due in about three weeks.

BKX tested the 52-day Moving Average this morning, then sold off.  We may anticipate BKX to decline for the next seven weeks with particular strength (possible panic) this weekend.  SOFR is soaring above its discount rate.  This information is not available in the normal news channels and may not appear until this weekend.  Today’s loss of support at the 52-day indicates smart money exiting the banking index.  The sideways consolidation after the initial sell signal in October has lulled investors to sleep again.

Gold did not make a new low, beneath the October 28 bottom at 3886.69, which completed a Master Cycle.  The new Master Cycle is appearing with strength today and may last to mid-December.  We may see gold break out above 4000.00 and continue going higher with growing strength toward the end of November and especially in early December.

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.

8:00 am

Good Morning!

SPX futures gapped down to 6757.50 this morning, making the October 29 high as the probable end of the Master Cycle.  This morning’s decline tested short-term support at 6748.48 (not shown).  Should the SPX bounce from here, the rally may  resume to test round number resistance (7000.00) and Cycle Top resistance currently at 7005.60.  Should it do so, the Master Cycle may extend  to Monday, November 10.  Meanwhile, the 6-month trendline lies at 6700.00, beneath which lies a sell signal.  Unfortunately, considering the downside is not in fashion.  We are now conditioned to believe that the next rate cut or QE may be rewarded with higher values in the market.

Today’s options chain shows Max Pain at 6855.00.  Long gamma lies above 6855.00 while short gamma dwells beneath 6800.00.

ZeroHedge reports, “US equity futures are under serious pressure this morning with all 3 indices down more than 1% with Palantir’s strong beat and raise not only failing to spur follow-through buying but sparking what appears to be momentum chasing revulsion. Combined with a pullback in crypto and some hawkish Fed remarks, an unwind in pockets of the hyper-momentum trade is taking hold.”

VIX futures rose to 20.48 this morning, soaring above the mid-Cycle support/resistance at 19.56, evidence of today’s forecasted trending strength.  It may be due for a pullback to retest the 52-day Moving Average at 16.72 by the weekend.

To0morrow’s options chain shows Max Pain at 17.00.  Short gamma has a monster holding at 15.00 while long gamma offers a substantial call wall at 20.00.

TNX is consolidating around the 53-day Moving Average at 41.01.  Tomorrow may exhibit a show of strength in the TNX, completing its first possible bullish fractal and confirming a buy signal for yields.  The Alternate view may show a panic decline instead, extending the Master Cycle to the end of the week.  Should that be so, the potential target may be  in the range of 36.00-38.00.

USD futures continue their rally, possibly building strength toward the weekend.  The probability of a pullback to the 52-day Moving Average at  98.28 may be rising, but its timing is unclear.  The top view reveals fractals may point to an immediate pullback, followed by a panic rally into the weekend.

Bitcoin is gaining strength to the downside.  Bearish momentum may turn into a panic by the weekend.  The Cycle Bottom support at 99633.99 may not hold.  The current Master Cycle may come to an end by the end of November.

BKX has lost its hold on the 52-day Moving Average, confirming its sell signal.   The Cycles Model suggests the next two days may be particularly strong to the downside.  This marks the first of seven weeks of potential decline.  Ending Diagonals are most likely to completely retrace to their origin, the April 7 low.

Gold futures made an overnight low at 3937.56, marking a retest of the October 28 Master Cycle low.  There may be an immediate surge in trending strength starting tomorrow, resuming the uptrend.  Should that be so, gold may resume its rally in a parabolic fashion.

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.

8:00 am

Good Morning!

SPX futures have risen to 6873.20 this morning, as a final probe to the Cycle Top at 6994.65 (7000.00).  A reversal from the Cycle Top marks the end of the current uptrend.    The Cycles Model suggests the final thrust may be over by mid-week.  Should that be so, there may be a dramatic shift in the trend by the weekend.  Following that, there may be a seven week decline, similar to the decline ending on April 7.  The target of that decline may be the the April 7 low.

The options chain is tightly wound today.  Max Pain may be found at 6860.00.  Long gamma may prevail above 6880.00 while short gamma becomes prevalent beneath 6850..00.

ZeroHedge reports, “US equity futures are signaling a solid start to November, led by Tech with small caps flat, as traders gauge the durability of a seven-month global equity rally fueled recently by strong tech earnings and easing US–China trade tensions.”

VIX futures continue to consolidate above the 522-day Moving Average showing a  buy signal.  The descending trendline lies above 18.00, while the mid-Cycle resistance is at 19.56,confirming a possible change in trend.  There may be a dramatic shift in velocity starting on Tuesday, with further confirmation in a week.  The Cycles Model also infers a possible 7-week rally in the VIX.

The November 5 options chain shows Max Pain at 17.00-18.00.  Short gamma resides at 15.00 while long gamma is strong above 20.00.

The uo-year Treasury Note index ;has risen above the 52-day Moving Average at 41.05 this morning, confirming the buy signal in yields.  The Cycles Model suggests a burst of trending energy by mid-week, with a potential target at mid-Cycle resistance at 42.81.

USD futures continue their climb above the mid-Cycle support/resistance at 99.83.  The Cycles Model shows USD gaining strength this week.  This pattern may persist to the end of November.  The decline in the Euro shows possible money flows to the USD.

Bitcoin has renewed its decline after being repelled at the mid-Cycle resistance at 111312.00.  The Cycles Model indicates a continued decline to the end of November.  Narrowing trading bands indicate a strong  (panic) move may be developing.  Bitcoin has gone nowhere since last December an may be ripe for a fall.

BKX is being held beneath the 52-day Moving Average at 149.70 this morning.  The Cycles Model warns that a breakaway decline may develop tomorrow, with multiple surges of potential panic losses through the weekend.

ZeroHedge remarks, “I think I’ve identified the four horsemen of the next stock market apocalypse — each one manageable in isolation, but collectively large enough to reshape a financial system priced for perfection.

Subprime auto, commercial real estate, private credit, and crypto all scratch me where I itch when thinking about precarious pockets of today’s stock market.”

Gold may have made its master Cycle low on October 28.  If so, today may reveal the first surge of trending strength to propel it above the Cycle Top at 4050.91 again.  Should that be so, gold may rise substantially to mid-December.

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.

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

Good Morning!

SPX futures rallied to 6922.30 in the after-hours, then sold off to 6865.00 as I write.  Today is day 253 (of a potential 258) in the Master Cycle.  It is in the reversal time zone, but this morning’s pullback is too shallow to make a judgement yet.    Intermediate support is at 6692.59.  The Trendline is near 6650.00.  The 52-day Moving Average is at 6614.71.  These three supports must be broken to confirm a sell signal.

Today’s options chain shows Max Pain at 6885.00.  Long gamma strengthens above 6900.00 while short gamma shows resilience beneath 6850.00.

ZeroHedge reports, “US equity futures drop as the Trump-Xi trade truce was in line with expectations and hasn’t provided impetus for stocks to move another leg higher, after Fed Chair Powell’s pushback on another rate cut in December being a lock, while Mag7 stocks are under pressure (META -7.8%, MSFT -3.2%) as we await AAPL and AMZN tonight.”

VIX futures may be consolidating above the 50-day Moving Average at 16.62 this morning.  The Cycles Model suggest muted activity until early next week.  Afterwards, a blast-off in volatility may resume until the end of December.  The target may be off the chart.

The 10-year Treasury Yield has gapped through Intermediate resistance and is now testing the 52-day Moving Average at 41.13, being propelled by the last two days of trending strength.  Bond volatility bottomed on Wednesday and may already be on the rise.  The Cycles Model suggests that the current trend may last to mid-December.  Trending strength may be high in the first half of November.

BKX may be retesting the 52-day Moving Average at 149.49 in a final attempt to extend beyond the Master Cycle high, currently on Monday, October 27, at 151.06.  A possible target may be 151.31, made on October 15.  The Cycles Model suggests a possible reversal may be made by Tuesday, November 4, or the following day.  The subsequent decline may resume until late December.  The cause of the reversal is a deterioration in funding of money markets about to become critical.

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.

8:00 am

Good Morning!

SPX futures have advanced to a morning high at 6917.00, approaching the Cycle Top resistance currently at 6961.40.  Further resistance lies at 7000.00.  Today is day 252 of the current Master Cycle, suggesting only a week may be left in this segment.  Following this we may see a two-month decline.  Meanwhile, the Fed may be adjusting their balance sheet to a new normal (much higher) level, suggesting inflation may be the pathway of least resistance.  This will be viewed as being broadly supportive of risk assets.  However, geopolitical events may put a dent in their plan.  Meanwhile, food stamps are set to be paused on Nov. 1 because of the government shutdown.

Today’s options chain shows Max Pain at 6865.00.  Long gamma gathers strength above 6895.00-6915.00, while short gamma lurks beneath 6840.00.

ZeroHedge reports, “… US futures march higher into today’s Fed and Mag7 earnings (GOOG, META, MSFT adding up to more than $9TN in market cap) on relentlessly positive AI news, optimism about trade and expectations of a cut from the Fed later.”

VIX futures have paused just beneath the 50-day Moving Average at 16.58 this morning.  There may be a marginal probe lower to complete the declining fractal.  A reappearance of trending strength next week may pull the VIX out of its basement funk.

TNX is hovering at the Cycle Bottom at 39.52.  While Wave (E) appears complete, it ahs a tendency to be a rogue Wave.  That being said, there is a possibility of a lower Master Cycle low at today’s Fed announcement (in Cycles overtime).  The Cycles Model suggests both today and tomorrow are high volatility days, suggesting a strong reversal.  Appetite for treasuries is waning…

ZeroHedge reports, “If yesterday’s 5Y auction was stellar, with solid demand across the board including a jump in foreign demand, then today’s sale of $44BN in 7Y paper, the week’s final coupon auction in an abbreviated schedule ahead of tomorrow’s Fed decision, was mediocre at best.”

USD futures are still hovering above the trendline and critical support at 99.24.  The Cycles Model suggests today is a high volatility day, leaving open the possibility of a short-term decline to 97.50, a Fibonacci retracement level.  The Cycles Model implies that the trend has changed to a positive one and may remain positive until the end of November.

Bitcoin slid beneath its 50-day Moving Average at 114277.00 and may be on a renewed sell signal.  It may receive temporary support at the mid-Cycle level at 110955.00 for a while.  However, the Cycles Model calls for a  panic decline in early November, suggesting a much deeper low.  A likely target may be the April 7 low at  74426.00.

Gold futures may have climbed back above the Cycle Top resistance at 4026.93 this morning.  It is capable to challenging  the trendline and its existing high at 4381.58.  The Cycles Model calls for a series of panic rallies, possibly to 4500.0, during the next week or so.

The Agricultural Index continues its advance,. but may be due for a pullback in the next week or so.   This is one sector to buy on the pullback, as the trend has become positive.  China has resumed its purchase of soybeans, raising the price per bushel of soybeans above $11.00.  In addition, there have been drought conditions in a majority  of the 50 states, leaving slimmer food supplies.

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.

8:15 am

Good Morning!

Please excuse my tardiness.  I converted my chart technology to a new system and am still learning the ropes.  Things should go smoother as I progress in the new technology.

SPX futures rose to 68843.90 as the overnight market attracted more buyers.  The Cycles Model suggests the rally may go at least to November 5, but may extend beyond that, due to high levels of FOMO and strong momentum.  Investors are betting on an end to QT, giving liquidity another boost.  RRP balances are depleted.  The fed must stabilize reserves to prevent a funding squeeze and reduce volatility.  Inasmuch as it may have an effect on risk-taking behavior, the condition may not last.

Today’s options chain shows Max Pain at 6855.00.  Long gamma gives a boost above 6895.00 while short gamma offers a massive put wall at 6840.00.  Dealers may do their utmost to keep the SPX “fenced in” between these two guideposts.

ZeroHedge reports, “The record-busting stock rally paused ahead of two huge days which include an avalanche of Mag7 earnings, central bank meetings, and the Trump-Xu summit summit.”

RealInvestementAdvice tells us, “We live in what Brett Arends claimed as “The Dumbest Stock Market In History,” but I believe it is potentially the most dangerous era. That phrase is not hyperbole as it reflects structural distortion, extreme valuations, and an investor base intoxicated by momentum and narrative.’

VIX futures have consolidated beneath the 50-day Moving Average at 16.55 this morning.  Today may be a Trading Cycle low, allowing the VIX to test the next level of support at 15.00.  The Cycles Model suggests that the VIX may remain subdued until early next week, when activity starts picking up.

Tomorrow’s weekly options chain shows Max Pain at 17.00.  There is minimal short gamma beneath it.  However, long gamma shows a massive call position at 20.00.  The Cycles Model shows a potential increase in hedging starting next week.

TNX is consolidating along its cycle Bottom at 39.39.  It may go lower temporarily, as the FOMC prepares its memo.  However, the Cycles Model shows a strong reaction, potentially from the FOMC announcement, starting on Wednesday and extending later into the week.

ZeroHedge remarks, “90 minutes after the day’s first auction, which saw foreign demand for $69Bn in 2Y paper slide, moments ago the Treasury concluded its second coupon auction of the day, and this one was far stronger.”

USD is testing its trendline and may decline a bit further.  However, thee may be a surge in trending strength after the FOMC announcement.  The Cycles Model shows a rising USD through the end of November.

Bitcoin continues to consolidate around the 50-day Moving Average at 114286.00 after making a Fibonacci 61.8% retracement.  It still has room to retrace near 120000.00, but it may not last beyond this week.

BKX is hovering above the 50-day Moving Average at 149.28 as it completes its current Master Cycle.  A decline beneath that level produces an actionable sell signal.  The next visible support is the mid-Cycle support at 135.34.  The Cycles Model suggests a decline may ensue until late December.

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.

8:00 am

Good Morning!

SPX futures reached a new all-time high at 6856.00 this morning, before a slight pullback.  On Friday the market opted to go higher.  This move may extend the rally another two weeks, while speculators are living dangerously as margin debt is peaking and liquid cash is at its lowest point in 5 years.  Today banks are launching the largest debt offering ever, to finance the expansion of AI infrastructure.  Currently, there are no revenues to support such a gargantuan debt.  However, a multitude of banks are taking up the offering, confident that there will be a market for this boondoggle.  In the meantime, the breakout has encouraged retail investors to join the momentum rally while  ‘buy the dip” speculators have moved on to yet another source of leverage to propel the market…options.  This is not just the same-day options that have become popular.  Wall street is seeking approval of quintuple leveraged ETFs using options that multiply the gains in a rising market, but may collapse to zero in a single reversal day.  Investors may not be able to cover fast enough should a strong reversal occur.  Stop losses may become meaningless in a low liquidity market with no margin for error.  Cycle Top resistance lies at 6936.60, with round number resistance at 7000.00.

Today’s options chain shows Max Pain at 6775.00.  Long gamma begins above 6800.00 while short gamma resides beneath 6750.00.

ZeroHedge reports, “US equity futures are higher after progress was made by US and Chinese trade negotiators, with a framework in place ahead to provide a basis for the upcoming Trump-Xi meeting on Thursday. As of 8:00am ET, S&P 500 futures rise 0.9% to a new all time high, having closed last week at a record, with Nasdaq and Russell outperforming as the framework deal is boosting Semis / Mag7 while rare earth plays are under pressure.”

VIX futures have declined to 15.62, negating the October 10 phase shift.  VIX may linger in no-man’s land for the next week or so.  A rise back above the 50-day Moving Average at 16.52 may give warning of an imminent reversal in the SPX.

Wednesday’s options chain shows short gamma residing beneath 17.00 while long gamma populates the options chain above 20.00.

The 10-year US treasury note yield has risen above the Cycle bottom at 39.91 on Friday and is hovering above it this morning.  It would usually indicate a buy signal.  However the FOMC meeting this week may obligate lowering the yield by purchasing bonds before the meeting and its announcement on Wednesday.  The Cycles Model calls for volatility to rise starting on Wednesday, suggesting the dip in yields may be temporary.

ZeroHedge observes, “With U.S. debt blasting past $38 trillion, the question isn’t if the reckoning comes—it’s how to face it.”

USD futures are easing lower as it may decline to test the trendline near 98.50 and subsequently the 50-day Moving Average at 98.17 in time for the FOMC.  The Cycles Model shows a jolt of trending strength may arise on Thursday to bring the USD back to trend.

Bitcoin reached a weekend high at 116500.00, having made an approximate 42% retracement and may be pulling back.  Should the retracement be over, the 52-day Moving Average at 114204.00 may provide some support.  Should it fail, a sell signal may be made beneath that level and a resumption of the decline may be assumed.  A natural target may be the April 7 low at 74426.00 in late November.

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.

7:30 am

Good Morning!

SPX futures rose to 6764.10, just ticks away from the all-time high.  There may be an even probability of a new ATH, but keep in mind that the trendline resistance is at that level.  Should a new high transpire, it may be limited and narrow, while downside risk remains elevated.  The Cycles Model shows no strong moves until the first week of November, leaving a sideways tilt until then.  This morning’s CPI print may be something to watch, as the annualized inflation rate will be calculated using these numbers.  Its impact  is being dismissed as irrelevant, but the markets seem to be skating on thin ice.

VIX futures made a marginal new low at 17.10, remaining above the 52-day Moving Average at 16.49.  The declining fractal appears complete, so  a reversal may be imminent.

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.

9:57 am

The Agriculture Index has emerged above its 50_ay Moving Average at 356.01, creating a buy signal.  It may pull back from here, leaving a possible higher low in the next two weeks.  It may resume its rally in early November with a certain amount of fanfare after testing the low.  This may present an opportunity to accumulate shares of Agricultural companies and commodities with limited downside risk.

ZeroHedge observes, “U.S. cattle futures are no longer on track for their largest year-to-date gain since 1978. Instead, selling pressure has eroded gains to about 25%, yet it still marks the strongest annual increase since 2010. The pullback comes as President Trump and White House officials confront yet another challenge in the fight against sticky food inflation: a nationwide cattle shortage (years in the making) that has pushed cattle futures to record highs and sent supermarket beef prices to unaffordable levels for working-poor households.”

9:45 am

BKX, our liquidity index, remains under its 50-day Moving Average at 149.16 and on a sell signal.  The decline is set to resume with a panic phase in early November.  It may not recover soon, as the current Master Cycle may continue to late December.  The April 7 low may be a likely target for this decline.  The weakening liquidity structure may cause dealers to tighten margin requirements.

ZeroHedge comments, “During a conference call with investors last week, JPMorgan CEO Jamie Dimon made a memorable response to a question from Wells Fargo analyst Mike Mayo about the collapse of a subprime auto lender called Tricolor that cost the bank $170 million. Tricolor went bankrupt due to allegations of fraud, including double-pledging of collateral, which led lenders to halt financing.”

7:45 am

Good Morning!

SPX futures consolidates in a range between 6682.00 and 6718.00 in the overnight session.  Short term support lies at 6682.00, giving way to an aggressive sell signal.  Beneath that, Intermediate support lies at 6646.00, beneath which lies confirmation of the sell.  The Cycles Model shows increased volatility today and possibly into the weekend.  There may be an outright panic decline in the first week of November.

There is a heavy volume of puts and calls at 6700.00 (Max Pain).  Long gamma emerges above 6740.00 while sort gamma rules beneath 6675.00.

ZeroHedge reports, “US equity futures are flat and European stocks headed for a record high as third-quarter earnings continued to flow in.  As of 8:20am, S&P and Nasdaq futures are little changed. Pre-market, Mag 7 are mostly flat except for a -3% selloff in TSLA given the underwhelming earnings release last night which saw profits tumble despite record revenues (pulled forward due to expiration of tax credits) on sharply higher costs.”

VIX futures are consolidating beneath the mid-Cycle resistance at 19.55 this morning.  The Cycles Model shows a potential spike in volatility today with particular strength of trend emerging in the first week of November.

The October 29 options chain shows short gamma ruling from 15.00 to 19.00, while long gamma starts with a bang at 20.00 where speculators have placed 16,773 call contracts.

TNX has moved higher, approaching its Cycle Bottom resistance at 39.98.  A Master Cycle low may have appeared yesterday, followed by a reversal.  However, there is no buy signal until it exceeds its Cycle Bottom where resistance may become support.  The Cycles Model suggests a panic buying spree beginning next mid-week, lasting through the first week of November.

ZeroHedge observes, “With market risk mostly off, especially among high beta momentum stocks, bonds have again emerged as a flight to safety and this was certainly on display during today’s auction of 20Y paper.

The reopening of 19 Year, 10 Month paper (cusip UN6) was the week’s only coupon auction, and was issued flawlessly and without a glitch amid solid -mostly foreign – demand; the high yield of 4.506% was up notably from last month’s 3.953% but more importantly, stopped through the When Issued 4.518 by 1.2bps, the first stop since July and followed two weak, tailing auctions.”

USD futures are hesitating in mid-course and may pull back in the next couple of days.  However, the trend is going higher.  There may be a boost in strength of the dollar this weekend with more strength resuming in the following two weeks.  The Cycles Model infers the USD is likely to rise to the Cycle Top  by mid-November.

Bitcoin was repelled at the mid-Cycle resistance at 110337.00 this morning.  There may yet be an attempt to approach the 50-day Moving Average at 114163.00 before reversing lower.  The next  lower test of support may be at the Cycle Bottom at 96111.00.  The Cycles Model infers that BTC may be in a downtrend to late November.

Gold futures rose to 4152.00 this morning as it recovers from its bout of weakness.  It bounced off the Cycle Top support at 3988.05 yesterday and may attempt a new high in the next two weeks.  Trending strength may return next week with a touch of speculative frenzy thereafter.  The Cycles Model suggests that gold may rise above 4500.00 by the end of the current Cycle.

Crude oil futures rose to 61.26 this morning, not testing overhead resistance at 61.61.  The Cycles Model suggests a possible imminent resumption of the decline as it may test a 5-year Fibonacci at 52.31 before moving higher.  The Cycles Model implies the decline may extend to mid-November.