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.

10:00 am

Good Morning!

SPX is challenging a minor trendline near 6850.00 this morning as it attempts a retracement bounce.  Once complete, it may decline to new lows beneath 6827.00, where an aggressive sell signal resides.  Aggressive sell signals often appear where the likelihood of a further decline may be 50% or more.  The next support is the Intermediate level at 6784.14, where the probabilities may exceed 70%.  The most commonly recognized support area is the 50-day (52-day) where the probability of a further decline may be 90% or more. While the November 7 low briefly went beneath the 52-day, it is considered a bounce off the 52-day.  Trendlines are important.  Friday’s high tested the 7-month trendline, while today’s retracement is testing a much smaller trendline, an extension of the Triangle formation.  Once beneath it, the decline is likely to resume.  Yesterday’s decline was highly unusual, considering this is a FOMC week.  The powers-that-be usually attempt to signal that “all is well” prior to a Fed announcement with a flat or rising market.  The break of the trendline, however small, may set the tone the the market reaction after the FOMC announcement.  The Cycles Model infers that there may be a panic reaction to the Fed on Thursday.

Today’s options chain shows Max Pain (minimal payout to options holders) at 6850.00.  Long gamma strengthens above 6870.00 while short gamma becomes dominant beneath 6840.00.  The downside fuse is short.

Zerohedge reports, “US futures are unchanged, with traders looking forward to two market-moving events on Wednesday: the Fed meeting (where 22bps of easing is priced in) and Oracle results. ”

VIX rose to a morning high at 17.20 and has settled back to its own trendline near 16.60 – 16.70.  It is on an aggressive buy signal with further resistance at the 52-day Moving Average at 18.39.    Smart money are taking their positions while the average investor waits for a rise above 25.00 or a breakout.  The Cycles Model allows two more weeks to rally with some panic days involved.

The December 10 options chain shows Max Pain at 17..00.  Short gamma dwells between 15.00 – 16.00.  Long gamma arises above 18.00, but concentrates under 25.00.  No one is expecting a blow-out move.

TNX may be regaining its upward momentum as the bond market may be about to remind the Fed that it cannot be toyed with.  It broke out above its trendline yesterday and may be approaching the mid-Cycle resistance at 42.45 (very near the 200-day Moving Average).  The Cycles Model suggests possibly three panic days (rallies) in the 10-year note over the next two weeks.  In the past, the Fed has consistently followed the direction that the bond market has given them.  Any attempt to do otherwise may lead to a disruption of major magnitude.

Bitcoin is attempting to exceed last Thursday’s high at 94089.00.  However, it is meeting resistance at the Intermediate demarcation.  Should it fail to go higher, the decline may resume to the Head & Shoulders target in the next several weeks.

Crude oil futures hit a new low at 58.03 this morning, beneath Intermediate support/resistance at 59.64 and the 52-day Moving Average at 60.04.  It is on a confirmed sell signal.  The Cycles Model suggests a further decline to the end of the month with a possible Fibonacci target near 52.00.  It may go lower, possibly as low as 44.00.

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.

2:07 pm

SPX has declined to short-term support at 6827.00, but not through it.  It has already crossed a short-term trendline, signifying weakness.  Beneath 6827.00 lies an aggressive sell signal. Investors should consider lightening up their longs, should SPX decline further.

RealInvestmentAdvice considers, “A recent article by Simon White, via Bloomberg, discussed the rising cost of margin debt for investors. While his analysis below compares the cost of debt to GDP, we will also consider a more critical comparison to disposable personal income (DPI).”

7:45 am

Good Morning!

SPX futures rose to 6885.00 over the weekend, then eased down to test Friday’s low.   The next two days contain a pivot, indicating a potential intra-Cycle reversal.  The next opportunity for a pivot may be near mid-day.  Currently the trendline offering overhead resistance is approaching 6900.00.  Should the SPX trend lower, an aggressive sell signal may be offered beneath 6825.00.   Intermediate support lies at 6773.98.  A decline beneath that support offers confirmation of the sell signal.  The Cycles Model remains relatively calm until Thursday, suggesting a downside panic may develop after the FOMC news release.  The expectation is that Powell may announce another rate cut, saving the Santa rally.

Today’s options chain shows Max Pain at 6870.00.  Long gamma rules above 6885.00 while short gamma becomes strong beneath 6850.00.

ZeroHedge reports, “With just 17 trading sessions left in 2025, stock futures edge higher again and are on pace for 10 gains in the past 11 days. S&P 500 futures were up 0.2% as of 5:32 a.m. in New York, with Nasdaq 100 contracts +0.3%.”

VIX futures rose to a weekend high at 16.39, testing the trendline.  While the crushing of the VIX appears to be complete, the magnitude of the decline signals a possible payback in the other direction.    A rise above the trendline gives a potential aggressive buy signal for the VIX.  Confirmation of the buy signal comes in above the 52-day Moving Average at 18.38.  The April high may come into play again.

Teh December 10 options chain shows Max Pain at 17.00.  Short gamma has narrowed down to 15.00 – 16.00.  Long gamma begins at 18.00 with max longs at 20.00.

The US 10-year Bond yield rose to a weekend high at 41.63, breaking through the trendline resistance near 41.00.  The breakout is surely to be recognized by the long UST investors.  The Cycles Model suggests a triple panic event occurring over the next two weeks.  The pressure on yields may be immense as bond long run for cover.  This somehow doesn’t jive with the nearly 100% expectation of a Fed cut on Wednesday.  What else is there?  With reserve levels no longer abundant, the Fed is expected to resume funding Reserve Management Purchases and Term Repo Operations to the tune of $45 billion per month stating in January.  Should the market react strongly, it appears that the announcement may be “too little, too late.”

USD appears to be consolidating just above Thursday’s Master Cycle low.  While USD appears to be sleepy, the Cycles Model suggests a very strong wake-up call arriving this week with knock-on effects for the next month.

Bitcoin is striving against the Cycle Bottom resistance at 91042.00 this morning, but is not expected to make a new high against Thursday’s high at 94089.00.  The Cycles Model suggests 2-3 weeks of further decline as the Head & Shoulder target looms.  Bitcoin may be an international proxy for liquidity and may be warning of an upcoming liquidity event.

Gold futures have remained flat for the past week.  However, the Cycles Model suggests a possible panic surge higher in the next two weeks.  Gold remains on a buy signal with a potential target near 4500.00.

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 reached a morning high at 6877.30, within the target range announced earlier this week.  Should the fractal high imitate its predecessors, it may be complete this morning.  A decline beneath 6810.00 instigates an aggressive sell signal.  The Sell signal may be confirmed beneath Intermediate support at 6774.80 with further confirmation beneath the 52-day Moving Average at 6740.98.  The possibility of a Key Reversal arises with a new high today followed by a decline beneath 6827.00.  Equities are skating on increasingly thin ice, with the Yen and domestic yields rising. The Cycles Model suggests the ice may break at any time.  Markets seem to be holding out until the FOMC announcement on December 10, but things may begin to unravel prior to that event.

Today’s options chain shows Max Pain at 6840.00 – 6845.00.  Long gamma has inserted itself at 6850.00 while short gamma rules beneath 6825.00.

ZeroHedge remarks, “Wall Street’s financial engineers thought they had found yet another way to turn financial markets into casinos.

The gimmick this time is with 3x, 4x, and even 5x leveraged ETFs tied to individual stocks and cryptocurrencies.

But, as RealInvestmentAdvice.com reports, the SEC just ruled against these new proposals, apparently drawing the line at 2x leverage as the rules state.”

ZeroHedge reports, “Stock futures rise as investors look ahead to Friday’s release of the Fed’s preferred inflation gauge, the core PCE, a reading that may help shape next week’s rate outlook as the BOJ charts its own divergent policy course.”

VIX futures declined to 15.55 this morning, setting up a high probability mid-Cycle reversal from a low point near 15.00.  There is a “shadow Cycle” which appears to target today or early next week.  Fractals are self-similar, pointing to a possible outcome similar to the March 22 to April 7 spike.  The Cycles Model anticipates a spike in VIX that may be larger than the one this spring.

The December 10 options chain shows Max Pain at 17.00.  Short gamma has narrowed down to 15.00 – 16.00.  Long gamma now begins at 18.00 and is well populated to 29.00.

The US 10-year Bond yield is moving higher with strength after overcoming the 52-day Moving Average at 40.79, reiterating its buy signal.  While many technicians realize the significance of being above the 52-day, the majority still calculate with a ruler, looking for the imminent breakout above the trendline.  By that time major moves will have begun.

ZeroHedge reports, “First things first, this is September data… so horribly lagged/stale… but, it’s all we have, so let’s dive in.

The Fed’s favorite inflation indicator – Core PCE – rose 0.2% MoM (as expected), which leave it up 2.8% YoY (as expected), slightly lower than August +2.9%…”

Bitcoin has reversed from its corrective high yesterday at 94089.00 and plummeted below 90000.00 before a bounce.  This registers a completion of the “Shadow Cycle”  previously mentioned in the VIX.   Since Bitcoin may be viewed as an international liquidity proxy, it may be warning of an imminent collapse in liquidity world-wide.

USD has tested both the mid-Cycle resistance at 99.11 an d the 52-day Moving Average at 99.15.  A (key) reversal may be at hand as the USD moves out of its Master Cycle low.

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.

3:04 pm

SPX is toying with the idea of a Key Reversal…a decline beneath 6810.00 would do the trick.  In addition, it would offer us an aggressive sell signal.  Further confirmation may come with a decline beneath the 52-day Moving Average at 6740.91.  The ultimate fake-out would be to close flat or slightly higher today, leaving the dirty work to be done in the overnight market.

8:00 am

Good Morning!

SPX futures consolidated beneath yesterday’s late afternoon high at 6862.42.  It did not reach the proposed target at 6875.00 – 6880.00.  This morning’s action may confirm the high or allow a brief probe higher.  The surface of the market remains calm.  However, there are swift undercurrents that may boil over at any time.  Yesterday may have offered the swing high for the current Master Cycle.  The Cycles Model suggests a possible three-week decline may be imminent.

Today’s options chain shows a much contested Max Pain level at 6850.00.  Long gamma may be found above 6900.00 while short gamma is strongest beneath 6800.00.

ZeroHedge reports, “US equity futures rise, trading less than a percent away from a new record high amid signs of a leadership rotation with Big Tech not leading the bounce this time.”

VIX futures are consolidating near yesterday’s low.  It appears sleepy, but may burst into action at any time.  The Cycles Model informs us of the possibility of a surge of strength that may be imminent.  The immediate target may be the April high.  However, a higher target may be implied.

The December 10 options chain shows Max Pain at 18.00.  Short gamma appears to be dwindling from   15.00-17.00.  Long gamma breaks out strongly at 20.00.

TNX broke above the 52-day Moving Average at 42.79 this morning, creating a buy signal (a sell signal for the UST).  While the breakout may remain unrecognized, the trendline lies near 41.30.  The Cycles Model offers today as a day of strength, which may propel it to, or above, the trendline,  That breakout may gain recognition that all is not well for bonds.

USD futures made a new Master Cycle low this morning.  A reversal above the 52-day Moving Average at 99.19 reinforces the existing buy signal.  The 200-day Moving Average is at 99.53, giving extra confirmation of the uptrend.  USD shorts are nervously sitting on a ticking time bomb that may erupt at any time.   The new Master Cycle may take USD higher through the end of the year.

Bitcoin extended the Master Cycle to a new high at 94089.00 before pulling back.  It sits above the Cycle Bottom support at 92195.00.  A drop beneath that level reiterates the sell signal.  The new Master Cycle may be short but strong, as the Head & Shoulders formation has been triggered and must be completed.   Bitcoin is a good indicator of international currency flows.  A person my buy bitcoin in London and sell it in New York.  Bitcoin has been in decline since China outlawed its use.  Now Europe may be on the verge of implementing capital controls, which may put a nail in the coffin for bitcoin.

The Japanese Yen has risen to 64.70 this morning, exceeding its prior high.  It is on a buy signal since early this week.  Crossing above Intermediate resistance at 64.82 and the 52-day Moving average at 65.47 may strengthen the new trend as it may reach its Cycle Top at 70.95 by the end of the year.  Underlying this, the Japanese 10-year bond yield, which topped out near 1.10% in July 2024 is now approaching 2% in a parabolic move.  While the Bank of Japan claims QE, a break above 2% signals QT, which starts draining liquidity as it repatriates back to Japan.  The offshoot is that the Yen has reversed and starting to climb, causing pain in the Yen carry trade in the US.

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.

3:40 pm

SPX may have completed its final probe higher prior to hitting the trendline, having consumed the time left in this fractal.  It may go modestly higher, but all the requirements for this formation have been met.  A sell signal may be found beneath 6810.00 with confirmation beneath the 52-day Moving Average at 6736.82.

ZeroHedge opines, “The conclusion to yesterday’s Global Daily was that we are still in a systemic metacrisis. True, many market metrics don’t show it – but how many deckchairs told the Titanic’s passengers they were heading for the iceberg? Markets have a vital role, as do chairs, but expecting them to reflect the potential enormity of what’s going on could end up with you being in very cold water.”

7:45 am

Good Morning!

SPX futures ran up to 6850.00 thus far this morning breaking out of a possible triangle formation.  The 2-hour “trading chart” is highlighted this morning to bring the triangle in sharper focus.  Should this be correct, the SPX may have the ability to rise to test the 7-month trendline at 6875.00 – 6880.00.  Triangles usually proceed a final move  in a series ending in a major reversal.

Today’s options chain shows Max Pain at 6830.00.  Long gamma prevails above 6880.00 while short gamma weighs heavily beneath 6800.00.

ZeroHedge reports, “US equity futures are higher again, led by small cap stocks. As of 8:20am ET, S&P futures are up 0.2% (they dropped following a very ugly ADP print at 8:15am), the same as Nasdaq 100 futs…”

VIX futures continue to consolidate between Friday’s low and the 52-day Moving Average at 18.40, showing very little stress.  A buy signal is found above the 52-day.  VIX has stopped its decline over the weekend when the Bank of Japan announced its consideration of higher rates after months of somnolence.  Rising rates in Japanese Government Bonds may have possible knock-on effects on multiple fronts, including the VIX.  Recall the BOJ’s announcement of higher rates in August 2024?  Something similar may be about to happen again, as the BOJ seeks to “normalize” its rates.

Today is options expiration in the VIX.   The December 10 options chain shows Max Pain at 18.00.  Short gamma is shrinking to 15.00 – 17.00.  Long gamma is rising above 19.00, but there is not a lot of long conviction yet.

The 10-Year Treasury yield has challenged Intermediate support at 40.60, but it may not last as it may be gathering strength to break out above the trendline near 41.40.  The Cycles Model shows an imminent return of trending strength that may force deleveraging of multiple markets.  Blame it on the Bank of Japan.  The gap between the JGB 10-year yield and the US 10-year yield is very wide and pressure to close the gap may bring trending strength back to TNX.

USD futures declined to 98.89, probing beneath the 52-day Moving Average at 99.07.  This may be a false signal to traders, since the current Master Cycle may have ended with this show of downside strength.  While dollar shorts may be relaxing at this probe lower, its may be gathering strength for a fiery rally, as the Cycles Model shows trending upside strength during the next three weeks.

Bitcoin just extended its Master Cycle high this morning and subsequently declined beneath its Cycle Bottom support/resistance at 92401.00. This action gives a sell signal as the decline is moving very fast.  The Cycles Model shows the decline resuming to the end of the year.

Gold futures are rising back above the Cycle Top resistance at 4231.00 this morning.  The Cycles Model shows a possible two more weeks left in the current Master Cycle, with the trendline near 4500.00.  A surge to the upper trendline is possible due to heightening international pressures.

The Japanese Yen has risen above its Cycle Bottom at 64.20, giving a buy signal.   The Cycles Model indicates a rally through the end of the year, allowing the Yen the ability to rise to its Cycle Top at 70.94.  This move may wipe out the Yen carry trade, as borrowers were anticipating ultra-low interest payments (.0025%) and a declining Yen.  Hedge funds using the Yen carry to ultra-leverage (50-1oox) their investment may already be feeling the pain.  Mutual funds and ETFs using leverage should be evaluated for their exposure to the Yen carry trade.

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 rose to a morning high at 6839.60 before easing down from its high.  A minor correction high may be complete in the next 1-2 hours.  The Cycles Model shows rising volatility for the balance of the week, suggesting the decline may resume imminently and continue over the next three weeks.  Intermediate support lies at 6750.00, beneath which a sell signal may be offered.  The 52-day Moving Average lies at 6725.00, which adds confirmation to the sell signal.  After a 1-month delay, the Fed’s balance sheet runoff (QT) ends today with a surge of Repo to the banks.  The question is, will the easing (QE) make up for the lost liquidity?

Today’s options chain shows Max Pain at 6820.00.  Long gamma may prevail above 6850.00 while short gamma resides beneath 6800.00.

ZeroHedge reports, “After Monday’s dismal start to December, US equity futures are higher (if only for the time being), although lacking conviction with few major catalysts on deck today.”

VIX futures dropped to a low at 16.66 this morning as it retests Friday’s low point beneath the trendline, having completed a 6-day decline.  The Cycles Model suggests increasing trending strength starting today and allows approximately 3 weeks of rally from here.

Tomorrow’s options chain shows short gamma residing from 15.00 to 18.00.  Long gamma begins at 19.00 and maintains strength to 25.00.

TNX is approaching its trendline near 41.50 after rising above its 52-day Moving Average at 40.81.  After having tested the 4.0% level three times in three months, it appears coiled to move much higher.   The Cycles Model allows three more weeks of rally, which may challenge the Cycle Top at 45.53.  TNX currently lags both Japan and Europe in rising rates.  Catch-up may be imminent.

USD futures bounced from the 52-day Moving Average at 99.01 yesterday and is testing the 200-day Moving Average at 99.61 this morning.  This action reiterates the buy signal for USD and the short squeeze ramps into high gear above it.  Dollar shorts have been feeling increasing pain since October.  The Cycles Model suggests a much greater intensity through the end of the year.

Bitcoin bounced from its low at 83828.00 yesterday.  The bounce may go as high as 89250.00, or near its 61.8% Fibonacci retracement at 89568.00 before before resuming its decline later this morning.  Bitcoin is trending inversely to the USD and may continue its decline to the end of December.

Gold futures rose to a high of 4269.00 before easing back to test the Cycle Top at 4223.00 this morning.  The rally may continue to rally with increasing strength over the next two weeks before ending its rally near 4500.00.

Silver futures rose to 59.072 this morning before easing back in a possible consolidation.  There are approximately two more weeks left in this rally with a possible target near 65.00.  Following that, there may be an approximate three week retracement as speculators take profits.  A retracement may decline as far as the mid-cycle support at 39.52.

The BKX persistent elevation may not last despite the resumption of repo by the Fed.  In spite of turning on the liquidity spigots, a rising 10-year Treasury note yield and Japanese Yen may adversely affect profits, as banks have been reliant on declining interest rates to stay ahead.  Rising rates may not only snuff out profitability but also reveal those institutions that have been on the brink.

Unlike the banks, insurance companies that sell life products and annuities have not recovered totally from the April 7 low.  That very fact allows the next three weeks’ decline to be a multiple of the April 7 decline.   I have not yet done a long-term Cyclical study on insurance companies, but may do so shortly.  The reason they are most at risk is because they are one of the prime users of the Yen carry trade to boost yields for themselves and their customers.  The next three weeks may be telling.

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 pulled away from the eight-month trendline to a morning low at 6790.60 thus far.  The high-to-high mini-cycle was 21.5 market days, 34.4 calendar days.  The next mini-cycle may encompass another three weeks from high-to-low.  The decline may test the 1987 trendline near 6000.00 during this portion of the Cycle.  An aggressive sell signal may be taken beneath 6800.00.  Confirmation exists beneath Intermediate support at 6745.00.  Prior to the holiday there were concerns that the American consumer but early shopping data has allayed those fears.  Despite market fragility, analysts believe that the market may go higher.

Today’s options chain shows Max Pain at 6830.00.  Long gamma may strengthen above 6875.00 while short gamma dominates beneath 6810.00.  Massive short gamma positions have the ability to force the market lower, despite improving conditions, as speculators attempt to lock in 2025 gains.

VIX futures rose above their diagonal trendline near 17.00 to a morning high at 18.33.  Once above the 52-day Moving Average at 18.35, the VIX may rocket higher, as today is a particular day of strength.

The December options chain shows short gamma between 16.00-19.00.  Long gamma is growing between 20.00 to 25.00.

The 10-year bond yield has jumped above the Intermediate support/resistance at 40.51 this morning, creating a buy signal for TNX.  Until today, the market has been quite sanguine about yields, expecting continuously lower rates to maintain price stability.  The Cycles Model anticipates much higher rates over the next several weeks.  A possible target for yields may be the Cycle Top at 45.53.  However, should it break out above that level, it could go as high as 48.00-50.00 in short order.

ZeroHedge comments, “The Two percent inflation target—monetary policy’s sacred commandment for three decades—has become structurally impossible to achieve. Not because central bankers lack skill, but because every attempt to hit the target destroys the financial architecture that previous monetary expansion built. This is the endgame of central planning: a system that cannot tolerate its own success criteria without collapsing.”

Bitcoin was crushed overnight as liquidity has dried up dramatically due to expectations that the Bank of Japan may raise borrowing rates their highest rates in 17 years.  The BOJ has been the source of ultra-low borrowing rates, fueling the growth of monetary assets through the Yen carry Trade.  Bitcoin is a prime example of a liquidity proxy, since there are no assets backing its shares.  It rises and falls based on the availability of excess liquidity.    The Cycles Model infers that liquidity may dramatically decrease through the end of December, propelling Bitcoin to its Head & Shoulders target and possibly lower.

ZeroHedge remarks, “After an ugly November (the worst since 2018), December is continuing that trend with a big drop overnight that shook what had appeared to be a stabilizing market.

Hawkish BoJ

The overnight plunge appeared to be triggered by Japanese government bond (JGB) futures tumbling on expectations that the Bank of Japan would raise borrowing costs at its December meeting.

Japan’s 2-year government bond yield briefly touched 1.01 percent, the highest since 2008, as traders bet the Bank of Japan’s long era of near-zero rates is ending. ”

Japanese Yen futures have risen to a daily high at 64.65, above the Cycle Bottom at 64.36, creating a buy signal.  This is a warning to those participating in the Yen carry trade, as yields may go considerably higher over the next 2-3 weeks.  The reason its that loans taken out against the yen  (creating a put) must be paid back in appreciated yen, collapsing the value of the transaction.  In the past seven months, the yen has declined as much as 11%, creating a profit from the loan transaction itself.  The reversal may erase the transaction profits to the point of creating a massacre in the carry trade.  Hedge funds, banks, insurance companies and asset managers have been using the Yen carry trade as a means of juicing yields.

Gold futures broke above the Cycle Top at 4212.00 on Friday and may have broken above the November 13 high at 4245.27 over the weekend.  The Cycles Model allows approximately three more weeks of expansion to a possible target at 4500.00.  Inflows to gold ETFs and mutual funds has increased, while Bitcoin has had outflows.

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 rose to 6831.50 this morning after futures went dark at 9:45 pm due to a glitch at the CME.  Many believe is the continuation of the rally from the November 21 low.  Currently the SPX is closing at a monthly loss.  There is some pressure to push the SPX above the October 31 close at 6840.00 to end the month with a gain.  Earlier this week I had calculated the 7-month trendline to be near 6835.00.  Today is may be closer to 6850.00, so a nudge to 6840.00 may still be beneath the trendline.  Equities are still in a corrective formation and today marks the halfway point in a Trading Cycle, which allows a reversal.

Today’s options chain shows Max Pain at 6790.00.  Long gamma resides above 6800.00 while short gamma lies beneath 6780.00.

ZeroHedge reports, “Update (0830ET): CME Globex Futures & Options markets have officially reopened after their overnight ‘cooling issue’. For now, Nasdaq futs are rallying…”

VIX futures bounced off the trendline to 17.49 thus far.  Whether this is due to the “glitch” or simply time for a reversal is to be determined.  The Cycles Model allows three weeks to rally.   Today is a “Cyclical match” to the March 26 low, suggesting a rally of similar dimensions.

The December 3 options chain shows Short gamma between 15.00 and 19.00 while long gamma breaks out above 20.00.

The 10-year Treasury Note is bouncing from a morning low at 39.90 as it may resume its rally for approximately the next three weeks.

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 continued their rally overnight to 6796.60, but have eased back as the morning progresses.  Resistance lies near 6770.00, the right shoulder of the Head & Shoulders formation, which has held the cash market thus far.  In addition, the 61.8% Fibonacci level is at 6768.00, which may also resist a breakthrough.  While the SPX may go higher, liquidity is thin and additional resistances are at 6800.00 and 6835.00.  Jobless claims tumbled this morning, easing the need for the Fed to stimulate with another cut.  In the past week, hedge funds and commercials have been trapped into selling low and buying high as moves have been extremely volatile.

Today’s options chain shows Max Pain at 6735.00, which is also Intermediate support/resistance.   Long gamma is above 6750.00 while short gamma lies beneath 6725.00.

VIX futures fell to 18.05 this morning, challenging the 32-day Moving Average at 18.32.  VIX is primed for a lift-off as the uptrend recommences.  The Cycles Model suggests a minor (trading Cycle) low may be at hand.  Trending strength begins on Monday.  Enjoy the holiday!

The December 3 options chain shows short gamma between 15.00 and 19.00.  Long gamma may begin at 20.00.

TNX has made a bounce that may turn into a mid-Cycle reversal, sending yields higher.  Keep that in mind as the pending rate cut may be postponed.  A rally above the Intermediate support/resistance at 40.59 may signal a major change in attitude about yields.

ZeroHedge notes, “It was back in February, when we explained to Elon Musk why his strategy to shock the US government into spending “efficiency” through DOGE, while noble, is ultimately doomed to wit: “What Musk is doing in trying to streamline the govt is admirable but ultimately it will be Congress that decides the endgame. And there things are as status quo as always.””

Bitcoin may have completed its retracement on Monday with a high probability of a resumption of its decline.  Today is a high volatility day and the outcome may offer a possible reversal.

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 remained beneath the 52-day Moving Average at 6716.00 in the overnight market, but remained flat near 6700.00.  Should the rally continue, the 50% retracement value is 6721.00 while the 61.8 Fibonacci retracement is at 6768.00.  SPX stopped at a Cyclical pivot point (18.5 market days and 25.8 calendar days) and has the potential to decline from here.  A sell signal lies at 6650.00.  The Cycles Model suggests the market may remain relatively calm this week, with volatility spiking again in early December.  Should the SPX decline beneath its Neckline at 6521.92, the decline may gain momentum with the 1987 trendline getting serious attention.

Today’s options chain shows Max Pain at 6700.00.  Long gamma may begin at 6735.00 while short gamma rules beneath 6650.00.

VIX futures made a morning low at 19.95 and is hovering near the low.  The mid-Cycle support at 19.91 may act as a pivot point for the VIX.  The strongest portion of the rally may be imminent, with the April 7 high as a potential target.  Trending strength appears during the first week of December.

Tomorrow;s options chain shows VIX puts dominate from 15.00 to 19.00, whil calls gain strength above 20.00.

TNX continues its decline and may continue to do so for approximately three more weeks.  The Cycle bottom at 39.57 is in immediate view but TNX is capable of a throw-under.  The popular opinion is that the declining rates are due to potential Fed cuts on December 10.  They may have it backward.  Declining rates may be due to a weakening of flows into equities with a serious rotation into treasuries as equities sell off.   The Fed, which has always been behind the 8-ball, may be obliged to cut rates after-the-fact.

USD futures are testing the 200-day Moving Average at 99.73 in preparation of the final probe toward the Cycle Top at 103.00.  Dollar shorts are about to be battered as the move may only take a week or so.

Bitcoin may have made an early Master Cycle low on October 18.  Should that be the case and having made its initial bounce, it may make a pullback to the mid 80’s with a maximum to 82000.00.  The ultimate target in this retracement may be the neckline at 98932.00 by the Christmas holiday.