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.

9:00 am

Good Morning!

SPX futures attempted to make a new high, but failed at 6881.80 thus far.  So close…this is the second attempt at the all-time high that ended marginally lower, instead.  The Santa rally may have failed to thrive.  The Cycles Model infers that stocks have entered their pivot/reversal zone.  The chances of a new ATH have blurred and may be erased shortly.  A decline beneath 6825.00 gives a structural sell signal, but note the options chain.  Further confirmation awaits beneath the Intermediate support at 6791.54.  The 52-day Moving Average lies at 6769.00, beneath which a sell signal is commonly given.

Today’s options chain shows Max Pain at 6870.00.  Long gamma may begin above 6880.00 , with massive calls (over 50,000) above 6900.00.  Short gamma begins massively at 6855.00 with 48,673 put contracts this morning, and more below.  Whichever direction the SPX goes, it may do so vigorously.

ZeroHedge reports, “US equity futures are flat, pointing to a muted open off the overnight session highs on the last full trading session before Christmas, as traders await the last remaining data sets of 2025 to see whether they could materially change expectations for Federal Reserve interest-rate cuts.”

VIX futures have risen to 14.45 thus far.   A buy signal awaits above the trendline at 16.00 while confirmation lies at the 52-day Moving Average at 18.31.  The VIX has been known to move rather explosively out of its Master Cycle lows.  This is something to watch for today.

Tomorrow’s VIX options chain shows short gamma beneath 15.00 while long gamma resides massively above 16.00.

TNX futures are at 42.00 this morning while the cash market shows 41.98.  The Cycles Model shows TNX emerging out of its doldrums in a possible breakout, rising to mid-January.  The five-year treasury note goes to auction today, while the seven-year not is scheduled to be auctioned on December 24.  Should the auctions not go well, hell breaks loose.

ZeroHedge notes, “It’s the last treasury auction week of the year, and due to upcoming holidays, we are running on an accelerated scheduled which means the 2Y auction which usually takes placed on Tuesday, is Monday’s business instead. It was a subpar auction with modest demand; overall grade – not great, not terrible.”

USD futures dipped to a possible early Master Cycle low at 97.85 this morning, with possible confirmation by year-end.  A rise above the mid-Cycle resistance at 98.77 may confirm the reversal.  Otherwise, USD has the option of a further decline to the Cycle bottom at 96.72.

Bitcoin fell beneath its Intermediate resistance at 89073.00 and is testing the Cycle Bottom again, at 86498.00.  It has performed a Master Cycle low at 85085.00 on December 19 and bounced, leaving the possibility of a decline to the first week of February.

Silver rose to a morning high at 70.75 before reversing back down.  This may be its Master Cycle high, as it has breached the upper trendline and may  have reversed beneath it.

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 6863.30 thus far this morning, just short of the 6865.00 resistance level mentioned on Friday.  The Cycles Model indicates that the SPX is at an important pivot point, suggesting a possible reversal may be at hand.  The consensus is that the markets are riding a wave of liquidity into the end of the year.  The Cycles Model indicates otherwise.  Massive selling lies ahead to fund the in-the-money calls (T+1) that expired on Friday.

Today’s options chain shows Max Pain at 6835.00.  Long gamma may begin above 6850.00 while short gamma lurks beneath 6800.00.

ZeroHedge reports, “As we previewed late last week, the Santa Rally is back all right, and US equity futures are trading near session highs with the Nasdaq 100 poised to wipe out December’s losses as revived appetite for technology stocks powered gains across equity markets.”

NDX futures rose to 25505.80 thus far this morning, momentum being propelled by fumes from Friday’s positive options expiration.  However, the December 10 high at 25835.00 has not been breached.  Today may be a day of strength for the NDX, but also a day for a reversal.

ZeroHedge observes, “Nvidia shares rose slightly in premarket trading in New York after Reuters reported that the US chipmaker has informed customers it plans to ship its second-most powerful AI chip, the H200, to China before the Lunar New Year in mid-February.”

VIX futures ;declined to 14.81 this morning, extending its Master Cycle low.  The Cycles Model cites today as a potential reversal day as the VIX may find “the floor.”

The December 24 options chain shows short gamma under 15.00 while long gamma prevails above 16.00 and has a presence to 35.00.

TNX has risen to a high at 41.69 this morning, under the critical 42.00 level.  The Cycles Model shows TNX in a sideways consolidation to the end of the year, then rising, with strength, to mid-January.

ZeroHedge notes, “For those traders who are still “out there” instead of the slopes of Chamonix mingling with freshly embezzled US tax dollars by way of Kiev, DB’s Jim Reid reminds that we’re now entering a very quiet spell for markets before Christmas, with data releases and other headline announcements almost completely drying up.”

Bitcoin may be reversing out of a 61.8% Fibonacci retracement of last week’s decline.  The
Cycles Model indicates that Bitcoin is very near its end, if not already on December 19.  It may take another day or two to resolve the pivot point.  With the resolution may come some high  volatility.

Silver futures have risen to 69.51 over the weekend, then eased down from there, testing the upper trendline.  The Master Cycle is stretched about a week beyond its median length of time.  It is time to be very careful with silver.  It may be due for a correction that may potentially decline to the mid-Cycle support at 41.67.  One concern of particular note:  The EU is preparing for war.  As a means of preserving their capital from fleeing, the EU may install capital controls to stymie capital flight.  European countries have been historically noted to abscond with privately held precious metals.  This may affect the price of precious metals in the US.

Gold futures rose to 4474.00 and still climbing in a stretched Master Cycle.  Resistance is at 4500.00.  Gold may be just a day or two from its top, an all-time high.  A correction down to mid-Cycle support at 3601.00 may be imminent.

The Yen is bouncing off support from its November low.  However, it has about two more weeks in the Current Master Cycle.  A deeper low is anticipated by the Cycles Model  The minimum target may be near 63.20, but given time, may decline to 62.30.  The Yen carry trade has been given a reprieve, if only for the next two weeks.  Meanwhile, the Bank of Japan may be worried that the Yen may have lost support, even after raising interest rates to .75% from .5%.  On September 19, 2025 (red line), the Bank of Japan announced the beginning of selling shares in the Japanese stock and real estate market to steady the Yen.  Instead of shoring up the yen, it caused another sell-off.  The current sell-off may destabilize the Japanese markets, thereby increasing the fragility of the US markets.

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.

1:29 pm

SPX continues to rise above its 61.8% Fibonacci retracement level at 6833.47.  The next resistance is at 6865.00.  Dealers are “locked in” to long gamma above 6800.00, causing them to buy higher until the reversal or the close, whichever comes first, when the final options expiration takes place.  A reversal may take place at any time up to the close.  The rally is artificial, being helped along by the dealers who must front-run the in-the-money options to the close of the day when options mature, followed closely by the 0DTE speculators who are riding the options gravy train to the close.  The reversal may come suddenly and without warning.  The markets may open “limit down” on Monday, so this is not a wait-and-see kind of top.

8:00 am

Good Morning!

SPX futures bounced off the 52-day Moving Average a third time overnight, rising to a third lower high at 6799.40 thus far this morning.  The law of physics appears to be working as the bounces lose momentum.  Simply put, liquidity may suddenly be draining from the markets.   This morning’s attempts at keeping the SPX at Max Pain (6785.00) for the morning options expiry may offer another explanation for this phenomenon.  The Cycles Model proposes that the SPX may decline through the 52-day Moving Average at 6764.00 by day’s end.  This may lead to a panic event early next week.

Another concern is investors are still in love with AI and Tech.  Risk exposure remains at high levels while margin levels have grown faster than the market growth.  What could possibly go wrong?

Today’s options expiration is the largest in history at $7.1 trillion.  December options expiration is usually the largest of the year, but this takes it all.  Today’s options chain shows Max Pain (smallest payout) at 6785.00.  Long gamma takes the majority above 6800.00 while short gamma dwells beneath 6770.00.

ZeroHedge reports, “Stocks look set toclose out a choppy week on a steady note, building on Thursday’s gains, spurred by cooler inflation that backs the case for lower borrowing costs. As of 8:00am, S&P 500 futures were 0.1% higher while Nasdaq 100 contracts were up 0.2% after the WSJ reported that OpenAI is set to raise $100BN in fresh capital (from sov wealth funds) removing near-term funding pressures across the AI sector.”

VIX futures dipped beneath the trendline overnight, but has recovered above it.  Just as the 52 day Moving Average offers support for the SPX, the 52-day reveals resistance for the VIX.  We may see a simultaneous breakout later today.   An alternate view is that we may sse the VIX pushed down to a new low prior to breaking out next week.

TNX futures rose from its Master Cycle low at 41.39 overnight to a morning high at 41.61.  Should this be correct, the new Master Cycle may rally through mid-January.  Overhead resistance at the neckline, once broken may result in TNX rising to the mid-40s, with the Cycle Top at 45.45 as an outlier.  The Fed’s clear bias toward easing has gone unopposed for 30 years until recently.  There have been a rising number of dissents with a bias for tightening.  December was the highest.  This may lead to higher volatility, especially with a possible new Chairman who is beholden to the White House.  The Cycles Model clearly shows rising rates going into 2026.

USD futures rose to 98.75 this morning, approaching the mid-Cycle resistance at 98.83.  A breakout may trigger a buy signal with confirmation above the 52-day Moving Average at 99.21.  The Cycles Model shows a burst of energy emanating from the USD over the weekend followed by a rising trend into the first week of January.

The Japanese Yen futures declined to 63.53, forming a bounce off the Cycle bottom.  This is not what the Bank of Japan has envisioned.  However, the decline and bounce may provide the energy to rally/break out above trendline resistance at 64.77.  Trending strength may return early next week as the Yen may have sufficient energy to rally through the New Year.

ZeroHedge remarks, “In the last central bank decision of 2025, the BOJ lifted its key rate to 0.75% from 0.50% in a widely anticipated and telegraphed move, taking borrowing costs to their highest level in three decades. It wasn’t enough, however, and after an initial kneejerk move, the yen plunged while yields soared as the market concluded that what Ueda did was too little, too late, and the hike was too vague to press the hawkish case.”

Bitcoin rallied from a low at 84562.00 to a morning high at 89451.00 before reversing back down.  It may embark on its final plunge with a double dose of trending strength into the next week.  The decline may be spectacular for those on the sidelines.  Not so much for those participants who are still long.

Silver is testing te Wednesday high, reaching 66.76 thus far.  This may be the final probe at the high, as the Master Cycle may have ended on Wednesday.  The new Master Cycle may decline into the first week of January.

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.

12:14 pm

SPX was repelled at the 50% retracement level at 6813.76 this morning, then restarted its decline.  This may have occurred at the behest of the dealers trying to nudge the SPX into long gamma territory above 6800.00.  SPX has since declined to  the 52-day Moving Average at 6764.17. A drop beneath it may result in the SPX going into a much steeper decline.

8:00 am

Good Morning!

SPX futures bounced this morning to retest the 52-day Moving Average at 6763.75, rising to 6756.60 thus far, before resuming its decline.  The stage is set for a potentially powerful decline toward the 1987 trendline near 6000.00 in the next week.  There is likely to be a Christmas bounce, but the Santa Rally is past.  The real panic may begin beneath the neckline at 6521.92.

Today’s options chain shows Max Pain at 6765.00.  Long gamma rests above 6800.00 while short gamma resides beneath 6750.00.  Options are off to a bearish start.

ZeroHedge records a tap on the brakes, “Stocks rebounded from Wednesday’s tech-led rout after an upbeat forecast from Micron helped put the brakes on a tech-driven selloff on a busy day for data and central bank meetings.”

VIX futures slid to 16.93, remaining above the trendline near 16.30.  It remains poised to break out above the 52-day Moving Average at 18.38.  The next resistance is the Cycle Top at 30.93.  Once above that the nest resistance is the April 7 high at 60.13.  VIX may be in a period of strength today that may extend several more days.

The December 24 options chain is locked in a ferocious tug of war with Mas Pain at 16.00.  Short gamma is losing strength while long gamma bursts on the scene at 17.00, with strong outposts of institutional investors every 5 points  above 20.00, stretching to 35.00.

USD futures have made their Master Cycle low on Tuesday and are lingering near (retesting) their low.  The mid-Cycle resistance is close by at 98.85 and the 52-day Moving Average is at 99.21.  The Cycles Model proposes a burst of energy over the weekend that may propel the USD above all resistance levels.  Once accomplished, the next target level may be 104.00 or higher.  The initial breakout may last to early January.

TNX futures have made a morning low at 40.96 thus far.  this morning., testing the descending neckline and potentially making a Master Cycle low.  It may yet decline to the 52-day Moving Average at 40.83 before a reversal is made.  Today is a powerful reversal day, so stay tuned for that event.

ZeroHedge reports, “‘A grain of salt’ is how many have described their position on this morning’s government shutdown-delayed release of October and November Consumer Price Inflation data.

Headline CPI slowed to 2.7% YoY in November (dramatically below the 3.1% YoY expected)”

The Japanese Yen is declining in a half-Cycle low, thus far at 64.11, possibly to the Cycle Bottom at 63.73 today or tomorrow.  However, a breakout may be imminent as the Bank of Japan raises its benchmark interest rate.  Trending strength appears next week and may redouble its effect through the year-end.

Mainichi.jp reports, “TOKYO (Kyodo) — The Bank of Japan is widely expected to raise its benchmark interest rate from around 0.50 percent to around 0.75 percent, its highest level in 30 years, at its two-day policy meeting starting Thursday, as inflationary pressures remain elevated due in part to the yen’s weakness.”

Bitcoin rose to test Intermediate resistance at 89909.00. this overnight.  It has eased down since then and may be declining beneath the Cycle Bottom at 87910.00.  The Cycles Model suggests the “bottom may drop out” over the weekend.  A Master Cycle low may be found by the end of next week.

9:42 am

BKX is consolidating beneath its trendline at 165.00 and its Cycle Top at 168.45.  It is on an aggressive sell signal.  This signal may be “for real” as the Bank of Japan raises its benchmark interest rate from .50% to .75% tomorrow.  It may not seem like much, but consider that the is a 50% increase of the benchmark rate, not seen in 30 years!  Banks and other financial institutions have relied on the “nearly free” Yen carry trade to borrow money in massive quantities to leverage treasuries and other securities to produce gains on very thin margins.

Today troubled banks are being propped up financially through REPO.  The Secured Overnight Finance Rate (SOFR) is at 3.69%.  This is the cost of money to troubled banks.  At the same time, healthy bank deposits are paid as little as 0% to 1%, with time deposits earning higher rates.  This can be lucrative for banks who have a good customer loan portfolio earning 6-10%.  However, when the economy slows down, deposits evaporate and loans are often unpaid or in default, forcing banks to go to the REPO window to stay afloat.     One such bank has withdrawn $158 billion from the Federal Reserve coffers, as a result, the Fed reserves fell beneath $3 trillion, causing reserves to become “scarce.”  That is why the Fed had to cut its rate to 3.75% and restart QE early to refill its reserve.

Silver futures have stepped back to a low of 64.69 this morning from yesterday’s Master Cycle high at 66.88.  This pause in the rally may cause profit taking and a further reversal.  The Cycles Model suggests that silver may correct to as low as the mid-Cycle support at 41.32 in the next several weeks.  The real parabola has not yet begun.

ZeroHedge observes, “Parabolic

Silver trends have become steeper and stepper. (sic)”

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.

10:56 am

“First, the stairway.  Then the elevator.”

SPX has crossed beneath the 52-day Moving Average at 6764.00.  There is nothing to stop the decline except except an occasional tap on the brakes at round number support down to the neckline at 6515.00.  Despite the warnings, retail investors are leveraged long while commercials and systematics have pulled back a bit from their ultra-long positions.  The Cycles Model suggests a week of pain may be in store for the longs.  The minimum target for the Head & Shoulders is 6122.00, very near the 1987 trendline at 6000.00.  But that is not all.  Should this decline go beneath the 43-year long trendline (it has been functioning since August 10, 1982), a serious reckoning may take place.  Confidence in a continuously rising stock market may be challenged.

7:45 am

Good Morning!

SPX futures bounced from the 52-day Moving Average at 6762.00 yesterday and followed up with a probe to 6827.00, its support level (not shown in the daily chart) that it had broken through on Friday.  Support has now become resistance and may repel further advances above it.  Long investors are becoming uncomfortable as they may lose the 52-day support later today. Should that be so, we may see a possible 4-5 days of decline to, or below, the Head & Shoulder neckline.

Today’s options chain shows Max Pain at 6810.00.  Long gamma strengthens above 6840.00 while short gamma resides beneath 6800.00.

ZeroHedge reports, “Stock futures are higher but with less than 10 full trading days left in the year, the Santa rally seems increasingly elusive, with traders struggling to find catalysts. The S&P 500 tested a key technical level on Tuesday, coming close to breaking below its 50-DMA. As of 7:15am ET, S&P 500 futures rose 0.3%, pointing to the first increase in four days for the S&P 500 as investor appetite returned after last week’s tech retreat…”

VIX futures declined to 16.12, beneath the trendline at 16.30.  A breakout above 17.51 gives the VIX a buy signal with possible confirmation above the 52-day Moving Average at 18.37.  The rally over the next 4-5 days may be especially strong as there may be multiple possible panic-up days starting today.

The December 24 VIX options chain shows puts in retreat with remaining strength beneath 16.00  Long gamma may begin at 17.00 but remains clustered beneath 25.00.  No one is expecting trouble this month.

TNX is rising out of what appears to be a shallow retracement, waiting for the signal to break out above 42.00.  The next two days may offer that opportunity as strength appears ready to move TNX higher.  An alternate view posits that the strength may offer a further retracement to the 52-day Moving Average at 40.84 before a breakout.

USD futures have reversed sharply out of the Master Cycle low at 97.87, reaching a morning high at 98.64, testing mid-Cycle resistance at 98.87 before a small pullback.  USD shorts got some relief this month, but the uptrend may be restored by the weekend as it breaks above resistance.  The Cycles Model posits a rising USD to early January.

The Japanese Yen may be challenging a resistance level at 64.70 this morning.  It is on a confirmed buy signal after rising above Intermediate resistance at 64.40 yesterday.  A rally above resistance may do serious harm to the Yen carry trade, as the loan principal appreciates, reversing a 9-month depreciation of principal, allowing borrowers to profit from a discounted repayment as well as low interest on the loans.  This has kept the markets liquid during the period of QT in the US bond market, which ended this month.  The Cycles Model suggests a tsunami rally may engulf the carry trade over the next three weeks.  Is this why AI data centers are “falling out of bed?”

Reuters advises, “(Bank of Japan) Summary

Silver reached a possible Master Cycle high at 66.63 this morning as it completes its Master Cycle.  Should that be so, silver may begin a month-long correction to mid-January.  The (proposed) rising Yen may pull liquidity out of the markets.  Depending on the severity of liquidity loss, silver may decline to its mid-Cycle support at 41.15 in the next Master Cycle.

Gold has failed to reach its October 20 all-time high at 4381.58.  It also has begun a corrective decline to mid-January.

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.

11:15 am

While stocks and bonds go into decline, foodstuffs may be on the rise.  The GSCI Ag Index is about to hit its Master Cycle low this week.  The Cycles Model suggests that food costs may rally to the end of March!  This is one sector to be long as a hedge against rising food costs.

USAToday comments, “Jesi Aviles knows exactly what her weekly grocery bill will be before she walks into Walmart.

“I know when I go in the grocery store, I’m not leaving without spending $400.”

The 32-year-old stay-at-home mom of five in Mount Airy, North Carolina, has watched that number climb steadily over the past few years.  Just about two years ago, she could feed her family of seven for $200 a week easily.  Now the cost has doubled. The family spends about $1,600 on groceries a month, more than their $850 rent.”

10:43 am

BKX has pulled back from its Cycle Top resistance and reversed beneath its upper trendline, giving an aggressive sell signal.  BKX has lasted beyond the mainstream stock highs due to investor rotation out of AI and retail stocks.  This creates a false sense that all is well in this category.  One cannot be further from the truth, as rising rates and rising Yen have taken away the free pass to profits in the financial.  While TNX is testing the 42.00 level, the Bank of Japan may come out with its revised Statement of Monetary Policy on Friday.

8:10 am

Good Morning!

SPX futures fell to 6770.50 overnight, coming near the 52-day Moving Average, but managed to crawl back up to the flat line this morning.  An appearance of normalcy on the surface hides the churning beneath.  Rotation out of AI and retail stocks has been finding a home among small-cap and mid-cap stocks, a risky bet.  November’s delayed employment report is due at 8:30 am.  The consensus is for a negative surprise.  The Short-term outlook is for a brief bounce this morning back to yesterday’s high at 6861.59.  The minimum decline after the bounce may be to the 52-day Moving Average at 6762.00.  However, a negative surprise may decline through that level.  The Head & Shoulders neckline is at 6522.00.

Today’s options chain shows Max Pain at 6820.00.  Long gamma begins above 6850.00 while short gamma rules beneath 6780.0.

ZeroHedge reports, “Stock futures are lower, but well off session lows, as traders await delayed jobs data that will shape the Fed’s next move. As of 7:15am, S&P 500 futures are 0.2% lower while Nasdaq 100 contracts are -0.3% with all Mag 7 names lower premarket; European equities are little changed.”

9:40 am

ZeroHedge observes, “Ahead of today’s jobs report, Goldman Delta One Head Rich Privorotsky wrote that with the October print backward looking and mostly govt related and irrelevant, “anywhere near consensus for November (+/-25k of 50k) feels like the sweet spot…that said, hard to see the FOMC feeling compelled to halt accommodation or even talk about hiking if labor momentum is still sub-100k on trend.”

VIX futures retested this week’s high but remained inside the trading range.  The Cycles Model infers the next two days may offer a strong (breakout) day, waking up the “somnolent” VIX.  The following week may offer higher than usual volatility as the VIX plays catch-up.

Tomorrow’s VIX options chain shows Max Pain at 19.50.  Short gamma rules beneath 19.00 while long gamma may be gaining strength above 20.00.  A nudge above 20.00 may send the VIX into orbit.

The Shanghai Composite has declined to the neckline of the Head & Shoulders formation at 3916.58 today, triggering that formation, with knock-on consequences.  The November 14 high was not its all-time high, which occurred in 2008.  Because it has made a later high, it has attracted many US investors chasing outsize gains.  Those gains may soon be losses.

TNX ramped up to the Head & Shoulders neckline at 42.04 this morning, testing that resistance.  It may have made a double directional signal last week, signifying the potential Master Cycle low.  A breakout may be imminent, signaling a possible rally for yet another month.  A move in either direction may do so in strength.

USD may have made its extended Master Cycle low at 97.90 this morning.  A reversal may signal a very strong uptick in the USD through the end of the year.

The Japanese Yen broke above Intermediate resistance at 65.45, confirming its buy signal.  The Cycles Model suggests the uptrend may continue to early January in increasing strength.  The 52-day Moving Average is at 64.98 above which the trend is commonly recognized.  The rising strength of the rally may be supported by short covering.  In essence, the Yen carry trade is a big short on the Yen.

Bitcoin is continuing its descent towards the Head & Shoulders target.  The Cycles Model shows at least another week of decline.  There is an option of declining to the year-end.  We may monitor bitcoin to see where & when the end finally comes.

West Texas crude declined to 54.97 this morning,  beneath the Head & Shoulders neckline at 56.30 and the Cycle Bottom at 55.59.  The final decline may be underway and may be over in the next two weeks.  This is rare positioning for such a formation, so it may bear monitoring.

ZeroHedge observes, “West Texas Intermediate oil fell below $55 a barrel for the first time since February 2021, the latest sign that crude supplies are outpacing demand as the market braces for a large surplus, and further helped rising hopes for a potential peace deal in the Russia-Ukraine conflict.’

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.

10:42 am

SPX has declined beneath the short-term trendline at 6827, which held it up until late last week.  The aggressive sell signal is on, but closing in on additional confirmation beneath Intermediate support at 6789.31.  The 52-day Moving average is near 6766.00, where most investors may recognize the sell signal.

7:50 am

God Morning!

SPX futures rose to 6864.10, a near perfect Fibonacci 61.8% retracement after a 102 point decline from Thursday’s high at 6903.46.  Contrary to some reports, the SPX did not make a new all-time high, as the   October 29 high at 6920.34 remains the record high, based on the futures, cash market and SPY, whose high on that date was 689.70.   Perhaps there is a bit of wishful thinking about the Santa Rally, while not a bust, came awfully close to making that ATH.  What caused the failure may have been a loss of confidence in AI and consumer discretionary stocks.  The rotation to small and mid-caps was not enough to push the major indices higher.  The Cycles Model indicates that Thursday may have been the Master Cycle high for the SPX.  This allows the potential of a decline to the end of January.  Should that be accurate, the next step may be a decline to test the Head & Shoulders neckline at 6520.00.

Today’s options chain shows Max Pain at 6850.00.  Long gamma may begin above 6890.00 while short gamma resides beneath 6825.00.

ZeroHedge reports, “Stocks are set to recoup some of Friday’s tech-driven losses, with a big week of data releases ahead, as the last full week of 2025 comes witgh a bang. Still, sentiment seems a little shaky, with rising signs of skepticism over AI and debate about the extent of rate cuts next year.”

VIX futures rose to 16.52 above the trendline at 16.30.  This may indicate an aggressive buy signal.  Confirmation may come above the 52-day Moving Average at 18.37.  While ;the average investor ignores the VIX until a breakout at 28.27, professionals are loading up on the VIX as a hedge against an increasingly uncertain market.  The Cycles Model suggests a potentially explosive move out of Friday’s (proposed) Master Cycle low.

The December 17 options chain shows Max Pain at 19.50.  Short gamma rules b etween 14.00 and 19.00.  Long gamma begins in strength at 20.00 and reveals institutional presence with large clusters of calls every 5 points to 110.00.

TNX retreated this morning after retesting the 42.00 level on Friday.  The top view shows the Cycles Model suggesting that the 10-year yield may be flat or lower this week, possibly targeting the 52-day Moving Average at 40.02, followed by a potentially explosive move higher.  Once the retracement is complete, a breakout to a mid-January high near the Cycle Top may be anticipated.

USD futures may be slowly rising out of their Master Cycle low on Thursday.  The Cycles Model shows noticeable activity in the USD starting later this week, with a possible breakout this weekend followed by a sharp rally to the first week of January.

The Japanese Yen rose above its Intermediate support at 64.48, amplifying its buy signal.  The rise in the 10-0year Japanese bond rate in late October signaled the end of rising AI stock prices which are dependent on longer-term financing (charts not available) for their data centers.  A breakout above the 52-day Moving Average at 65.05 may signal the end of the Yen carry trade.  The Bank of Japan will issue a new statement on monetary policy on December 19.  The Cycles MOdel suggests this may cause a great amount of volatility in the Yen.

Bitcoin appears to be sliding down the Cycle Bottom at 89087.00.  Bitcoin may “fall off the luge” later this week as the decline accelerates.  While the normal Cycle bottom may be scheduled to occur within the next two weeks, the decline may continue with strength to the end of the year.

Gold futures may have made a secondary high on Friday at 4384.15.  The problem is, the all-time futures high was 4398.00 on October 20.  Note that TNX made its low on October 22 and has been trending higher since.  The USD made its low on September 17.  These events have kept gold in a corrective formation with a possible lower low in January before trending higher.    Commentators are confident that the bull market in gold may last another year.

Silver futures may have made a new all-time high on Thursday while completing a probable Master Cycle high.  However, there may be room for yet another new high this week.  The decline on Friday after making its high has  been retraced to 64.18 this weekend.  Retracements of this nature may be strong enough to make investors to believe that it will go higher, but may turn into a false flag.  The real parabola may not have arrived, yet.

Crude oil futures have declined over the weekend to 56.67, threatening the neckline of the Head & Shoulders formation near 56.50.  Crude has about two weeks to decline beneath the neckline, followed by a snap back to retest the neckline resistance.  The head & Shoulders formation may take two months to complete.

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.

The Feast of Our Lady of Guadalupe

11:04 am

SPX has declined beneath the December trendline at 6827.00, creating a potential aggressive sell signal.  An aggressive signal comes with possible bounces back above the trendline, but is more likely than not to be a valid signal.  The signal may be confirmed beneath Intermediate support at 6791.13 with additional confirmation beneath the 52-day Moving Average at 6763.82.   Take appropriate action.

ZeroHedge remarks, “The fecal matter was already starting ti strike the rotating object following Broadcom’s disappointing results last night, but the bottom just dropped out of stocks  (and crypto) as the following headline hit the Bloomberg screens:

• *SOME ORACLE DATA CENTERS FOR OPENAI DELAYED TO 2028 FROM 2027″

9:30 am

Good Morning!

SPX futures rose to 6911.80 this morning, making a new retracement high, but not a new ATH.  The cash market high remains at 6903.46. The main view of this action is that the SPX may very soon break down to challenge the neckline of the Head and Shoulder formation at 6521.92.  Crossing beneath the neckline may lead to a further decline to the 1987 trendline near 6000.00.  The alternate view is that a new all-time-high may be made within the week, negating the Head & Shoulders formation, followed by a major reversal in the following week.  The Cycles Model suggests a possible triple panic threat emerging next week with a potential of follow-through during January.  An aggressive sell signal may be given beneath 6827.00.

Today’s options chain shows Max Pain at 6875.00.  Long gamma may strengthen above 6880.00 while short gamma resides beneath 6850.00.

ZeroHedge reports, “US equity futures are mixed; with small caps higher and tech stocks lagging. As of 8:15am ET, S&P 500 futures fall 0.1% after hitting a fresh record high yesterday; Nasdaq 100 contracts -0.5% amid signs of rotation out of tech as the equity rally broadens…”

VIX came off its possible Master Cycle low this morning, but has not crossed above the first resistance at the trendline, near 16.30.  Should the VIX complete a reversal. the new Master Cycle may last until the end of January.

The December 17 options chain shows Max Pain at 19.50.  Short gamma resides between 14.00 and 19.00.  Long gamma becomes strong above 20.00 and shows institutional presence every 5 points up to 100.00.

10-year Treasury bond yields rose to 42.01, just short of a breakout this morning.  The Cycles Model may give TNX the opportunity of a spike rally this next week to finish off the current Master Cycle.  Should TNX make a deeper retracement low, the alternate view is to reach the Cycle Top at 45.50 by mid-January.

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 declined overnight to 6811.30, then bounced to 6869.00, making an exact 61.8% Fibonacci retracement.  Should SPX reverse down, it will have given us an aggressive sell signal.  Aggressive sell signals are fraught with blow-backs and rising volatility.  However, once the decline is underway, the next potential support level may be the 52-day Moving Average at 6752.70.  There is a strong likelihood that the decline may completely retrace the rally from November 21 before a significant bounce occurs.  The Cycles Model suggests today may be a high volatility day, with the potential for a panic decline.

Today’s options chain shows Max Pain at 6880.00.  Long gamma resides above 6900.00 while short gamma prevails beneath 6850.00.  Should the SPX repeat the overnight futures session, short gamma may affect trading today.

ZeroHedge reports, “US equity futures are lower, as lousy earnings and an ugly capex forecast by Oracle reversed the market euphoria following the “more dovish than expected” Fed rate cut.”

VIX futures rose to 16.88 and declined back beneath the trendline near 16.40.  The Cycles Model suggests a breakout to new highs in the VIX may be imminent.  VIX can go from very sleepy lows to dynamic highs in very short periods of time, as seen in April.  A repeat performance may be in the making.

The December 17 (monthly expiration) options chain shows Max Pain at 19.50.  Short gamma runs strong between 14.00 and 19.00.  Long gamma Starts at 20.00 and runs to 100.00, thanks to institutional participation.  This could be an interesting op-ex.

US 10-year bond yields plummeted to 41.23 during the overnight session, finding possible support at the trendline near 41.25.  It opened at 41.31, suggesting a bounce/reversal may have begun.  The Cycles Model infers a super-abundant strength over the next several days, implying a breakout that may end at the Cycle Top at 45.50 in the near future.  The ensuing rally may prove once and for all that the Fed does not control rates.

ZeroHedge observes, “Tl;dr: The FOMC cut rates by 25bps to 3.50-3.75% as expected, with a 9-3 vote split; Miran sought a 50bps cut, while Goolsbee and Schmid preferred no change.”

ZeroHedge opines, “Rate Cuts Are Priced In—Forward Guidance Is the Catalyst

• Recent hiring data points to a weakening labor market.

• The Fed will start reinvesting more in Treasurys.

• The 2026 voting makeup will likely favor more easing.

The Federal Reserve’s monetary policy path should remain dovish…”

USD is in the process of making a Master Cycle low today near the current low of 98.37.  A reversal above the 52-day MovingAverage at 98.99 offers a buy signal for USD>  The Cycles Model implies that USD may have a very strong breakout above all the support/resistance lines as early as tomorrow.  The new Master Cycle may last to the first week of January.

Bitcoin has declined beneath the Cycle Bottom support at 90245.00, making a morning low at 89429.88.  The Current Master Cycle has about two more weeks of decline ahead.  Note the Head & Shoulders target appears to be deeper than the April 7 low.  This poses serious consequences for international liquidity.

Silver futures rose to 63.25 during the overnight session, continuing its course toward the upper trendline near 65.00.  The Cycles Model shows today as a particularly strong trading day.   It may “throw-over” as the momentum carries it higher over the next week.  The current Master Cycle may end abruptly, so caution is urged.

Gold futures remain within their two week trading range.  However, a breakout may be imminent as the Master Cycle winds up in the next week or so near 4500.00.

Crude oil futures made a morning low at 57.0, very near the Head & Shoulders neckline.  Should it cross beneath it, the formation may be triggered with serious knock-on consequences.  The Cycles Model allows about two more weeks of potential decline, giving it plenty of time to make its target.

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 declined to 6826.50, challenging the demarcation that may announce the resumption of the larger decline.  Should that be so, the next  level that may produce a bounce may be the 52-day Moving Average at 6754.77.   The Cycles Model infers increasing volatility today with a possible panic decline tomorrow.  The Head & Shoulders formation, once activated, defines the potential minimum decline.  Additionally, Ending Diagonal patterns are often retraced to their origins, indicating a potential decline to the April 7 low at 4835.00, a potential 30% decline from the all-time high.

Today’s options chain shows Max Pai at 6855.00.  Long gamma may begin above 6860.00.  Short gamma appears beneath 6825.00.

ZeroHedge reports, “US equity futures are flat ahead of a Fed meeting where a rate cut is assured (the only question is whether it will be hawkish or dovish) and Oracle results later.”

VIX futures rose to 17.57, above the trendline near 16.50.  It is on an aggressive buy signal, where the riskiest, but most lucrative positions may be made.  To the average investor, VIX appears to be very sleepy.  The buy signal is confirmed above the 52-day Moving Average at 18.40, where most professional hedging begins.  The average investors may wait for a breakout above 28.27 before stepping over to buy protection.  A potential target for a bullish move may be the April 7 high, at 60.13.  A more likely target may be the August 2024 high at 65.73.

Today is options expiration for the VIX, so many positions are closing out.  The December 17 (monthly) options chain shows  Max Pain at 19.50.  Short gamma has the majority beneath 19.00.  Long gamma picks up above 20.00.  The majority of options investors are short.  Ms. Market often proves the majority wrong.

The 10-year Treasury Bond yield futures rose to 42.12, while the cash market elevated to 42.04.  This may form a neckline of a Head & Shoulders formation with a minimum target at 44.51.  Note the Cycle Top resistance is at 45.50.  There may be a pullback earlier today before proceeding to break through the neckline.  However, bond volatility is starting to move higher.  The Cycles Model offers a triple whammy of strength over the next two weeks that may become chaotic.  A hawkish rate cut suggests there may be no further cuts for the next three FOMC meetings in 2026, after which Powell steps down.  Investors seem to be anchored to the notion of three mid-Cycle rate cuts, signifying a potential loss of confidence.

USD futures are creeping higher, along the 52-day Moving Average at 99.15 and has moved above the mid-Cycle support at 99.01.  A clear buy signal may be offered above the 200-day and Intermediate resistance at 99.49.  The Cycles Model suggests a powerful move higher in the making, with extra strength beginning this weekend.  The USD may continue its upward path through the first week of January.

Bitcoin has moved beneath Intermediate resistance at 92997.00, creating a potential sell signal.  Its retracement high at 94617.00 was brief and vexatious, as a sell signal had been previously given.  However, volume has dropped off considerably, suggesting that confidence was waning.

While gold continues to plod along beneath its Cycle Top resistance, silver futures have gone parabolic.  This morning’s high is 62.13, suggesting the potential target at 65.00 may be met or exceeded.  There is an approximate week left in this Cycle.  Many speculators may attempt to go long, to their ultimate dismay, as silver may pull back as much as 50%.

ZeroHedge opines, “The Silver Slingshot

For the last 18 months, the Gold-Silver Ratio (GSR) has been the “widow-maker” for precious metals bulls. It has tested the patience of anyone paying attention to hard assets. While gold spent late 2024 and early 2025 shattering records and grabbing headlines, silver—the bipolar cousin that is half monetary metal, half industrial commodity—lagged behind.”

The Japanese Yen slid beneath the Cycle Bottom support at 63.99.  The perceived weakness may not last, as the yen is due for a shot of strength by the weekend.  The BOJ may make its statement on monetary policy on December 19.  The Cycles Model suggests turmoil may result through the first week of January following that statement.

West Texas Crude oil declined to 57.66 this morning.  The neckline of a Head & Shoulders formation resides near the Cycle Bottom at 56.88.  Should the decline go beneath it, the Head & Shoulders formation may be activated.  The Cycles Model suggests the decline may continue through the end of the year.