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.

9:45 am

The Ag Index is correcting after its rally from its Cycle low in August.  It may continue to decline to mid-October, but may provide an opportunity to “buy the dip.”  The price of foodstuffs may rally dramatically due to global unrest and weather-related shortages.

ZeroHedge observes, “American farmers and ranchers who have sold or exchanged livestock due to drought conditions are eligible for tax relief, the IRS said in a Sept. 22 statement.

Generally, livestock sold due to drought must be replaced within four years. Under the latest extension, farmers and ranchers who had sold livestock due to drought, with replacement periods scheduled to expire by the end of 2025, will now have until the end of the 2026 tax year to make replacements.”

TheEpochTimes comments, “You have doubtless seen the price of beef at the store. It is shocking, outrageous really, ticking up higher and higher each week. When all this began four years ago, many people assumed that prices would settle back down after the crisis ended. That has not happened. The problem is getting worse, not better.

Checking in on the CPI for ground beef, we were shocked to see double-digit rates of inflation. The price of beef steaks in five years has gone up fully 50 percent and keeps rising.

8:00 am

Good Morning!

SPX futures made a 50% retracement of yesterday’s decline thus far.  The absence of a new high may be an early sign that the uptrend may be over.    Rejection at the Cycle Top resistance currently at 6720.21 was anticipated at this late stage in the Master Cycle.  The trendline supporting the uptrend lies near 6500.00.  It may be too early to call the top, but the conditions are there for a strong reversal.  The Cycles Model calls for growing strength of trend for the balance of the month.  Should the reversal take place, the Model  infers a decline into early October.  The conditions are right for a serious decline with the corporate buyback blackout and end of quarter rebalancing either selling or abstaining from new purchases during the earnings reports.  Retail investors have been steadily losing confidence witnessed by the record-breaking use of call options instead of direct participation in the market.  Markets thrive on confidence and decline on the fading belief that markets can be trusted.

Today’s options chain reveals Max Pain at 6670.00.  Long gamma comes in above 6685.00 while short gamma rules beneath 6650.00.

ZeroHedge reports, “US futures are once again higher after taking a brief pause yesterday, led by Tech, with all of Mag7 higher pointing to a stronger open as Alibaba’s spending promise and Micron’s upbeat outlook lift sentiment on AI. Global stocks resumed their rally after a pledge by China’s Alibaba for more spending (now the mere promise of more capex is sufficient to send your stock ripping) and Micron’s upbeat forecast lifted sentiment on AI (even higher… if that’s possible). As of 8:00am ET, S&P and Nasdaq futures rose 0.2% after big tech’s slide in the prior session broke a streak of records; Mag 7 are all green led by AMZN, +1.6% while TMT is boosted by Micron rising +1.5% after strong earnings underscored the boom’s ongoing momentum. Semis were bid after Alibaba jumped 9% in typhoon-hit Hong Kong on plans to boost AI spending beyond an initial $50 billion target. According to JPM, the AI-theme should perform well today (when does it not), including Critical Metals. Cyclicals are leading Defensives. The curve is steepening as 2Y yields are -2bps and the 10Y rises 3bps to 4.13% as the USD is bid up for first time this week. Trump said that Ukraine, with NATO help, has the tools to win back all of its Russian-occupied territory, included continued US weapons sales to NATO, and should shoot down Russian planes that enter its airspace. Gold held near all-time highs. Today’s macro data focus is on Home Sales, Building Permits and Mortgage Apps.”

VIX futures consolidated within yesterday’s trading range, remaining above the 50-day Moving Average at 15.86.  VIX gave an early buy signal which should not be ignored.  Trending strength may be due for a pickup this week, which may be accompanied by a breakout above the trading channel and more substantial recognition of the new trend.  The Cycles Model suggests a possible rally into early-mid October.

Today is (weekly) options expiration for the VIX, so this report is on the October 1 expiration.  Max Pain resides at 17.00.  Short gamma is strong at 15.00-16.00 while long gamma ig gaining adherence above 20.00 with conviction fading above 25.00.

TNX has stalled near the Triangle trendline at 41.25.  It may be due for a burst of energy that allows it to test the 50-day Moving Average at 42.48 in the next few days.  Subsequently, it may be due for a correction lasting about 3 weeks.  The recent plunge in rate volatility has been painful for institutions that have purchase hedges against rising rates.  This may cause them to drop their hedges (at a loss) in time for rates to start rising again.

ZeroHedge observes, “At the start of a new week of coupon issuance, the market (the bond market at least) has been remarkably stable, with yields today barely budging and trading where they closed last Friday, just around 4.13%. Which is why the market barely moved after today’s 2Y auction passed without a glitch.”

Bitcoin is consolidating beneath its 50-day Moving Average at 114254.00.  The Cycles Model offers a triple dose of trending strength through the weekend, suggesting a strong decline ahead, lasting to early-to-mid-October.

Gold futures are consolidating above the Cycle Top support/resistance at 3737.00.  A decline beneath that level may precipitate a sell signal as the rally completes its final probe to an all-time high.  The Cycles Model suggests that, once the reversal is made, a decline may follow to mid-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.

8:15 am

Good Morning!

SPX futures reached 6697.80,  hovering just beneath yesterday’s high.   The Cycles Model infers that, while there may be up to another 2 weeks left to the current Master Cycle, the fractal may be inverted and due for a reversal at any time.  In addition, This week offers multiple days of strength that may accentuate a move in either direction.  Today is day 253 of an average 258 days in a Master Cycle.  Prepare for a reversal.

Today’s options chain shows Max Pain at 6+675.00.  Long gamma rules above 6700.00 while short gamma comes into play beneath 6650.00.

ZeroHedge reports, “US equity futures are flat after Monday’s latest dose of AI excitement (where nobody seems to know where the funds will come from, but then again nobody seems to care) drove indexes to fresh highs. S&P futures are unchnaged, with Nasdaq 100 futures fractionally in the red, with Mag7 names mixed in premarket trading as Semis have a slight bid. BA is +2.3% on a potential order stemming from the US/China trade talks. There’s a lot going on – from a looming government shutdown to surging Chinese exports – but no clear way to play it. Bond yields 1-2bps lower as the yield curve shifts lower; USD is flat. Cmdtys are mixed with crude and precious leading; gold +90bp as China moves to custody gold similar to NY Fed. OECD hikes global growth estimate for FY25 from 2.9% to 3.2% with US growth est. moving from 1.6% to 1.8% and 1.5% for FY26. OECD also predicts that the full impacts from tariffs have yet to be felt. The macro data focus is on Flash PMIs and regional Fed activity measures. Today’s main event is Fed Chair Powell’s economic outlook.”

VIX futures are hovering above the 50-day Moving Average and on a buy signal.  The next resistance level is the mid-cycle resistance at 19.39.  A breakout of that level may be universally recognized as a buy signal and a confirmation of the Cyclical buy signal.  The Cycles Model suggests growing strength of trend to the week of September 6.

The 10-year treasury yield remains above the lower Triangle trendline.  The Cycles Model infers a potentially strong move in the next couple of days that may bring TNX up to the 50-day Moving Average as high as 42.54 before a three week correction.

USD futures are consolidating beneath the 50-day Moving Average at 98.07 this morning.  While not on a (recognized) buy signal above the 50-day, the Cycles Model infers a rally in progress until mid October.  A breakout may not be universally recognized until it overcomes the declining trendline currently at 99.00.

Gold futures are experiencing multiple days of strength this week as it throws over its Cycle Top.  This condition may linger to mid-November as the drumbeat of war in Europe and the Middle East grows louder.  While most associate the rise in gold to inflation, that is a secondary effect.  Historically, it has been shown that war is the primary driver for the price of gold.

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!

SPX futures are hovering beneath yesterday’s all-time high.  On the menu today is the largest position of maturing/expiring call options in history.  Should the majority of calls mature above Max Pain, the dealers will be scrambling to fulfill those maturing options, causing a spike higher.  The Cycles Model suggests resistance may occur near the Cycle Top at  6688.85.  Once expiration is passed, there may be a “let-down” as dealers sell shares held long to fulfill their obligations to the call options holders.  There is no free lunch.  The Cycles Model shows a possible burst of volatility on Monday following options expiration.

Today’s afternoon expiry shows Max Pain at 6580.00.  Long gamma becomes strong above 6600.00.

ZeroHedge reports, “US stocks are set for a quiet finish to a busy week in which the Fed’s first step in what will be a series of rapid interest rate cuts propelled markets to fresh highs. After all four major indexes – DJIA, SPX, Nasdaq and Russel – closed at a record high for the first time since November 2021, futures are flat this morning, with the S&P unchanged and Nasdaq up 0.1%, as Mag 7 stocks are mostly higher led by the +1.1% and +0.7% in TSLA and AAPL. Overnight the BOJ spooked risk assets when it kept rates as expected but surprised markets by announced a 330BN yen annual sale of its massive ETF holdings. The yield on 10-year Treasuries climbed three basis point to 4.13% after yesterday’s sharp move higher, which helped the dollar rise for a third day. Commodities are mixed: oil is lower, while previous metals/ags are both higher this morning. Today sees a much-anticipated call between Xi and Trump at 9am New York, with TikTok and trade likely on the agenda.”

VIX futures may be consolidating beneath the 50-day Moving Average at 15.86 this morning.  There may be efforts to suppress the VIX today to keep the markets calm.  The Cycles Model shows a possible burst of market strength on Monday following options expiration.  The declining trend channel may be broken out.

The September 24 options chain shows Max Pain at 16.00.  Short gamma still resides at 14.00-15.00.  Long gamma may begin in force above 16.00 and strengthens through 20.00.

TNX rose to 41.41, rising above the year-long Triangle trendline and offering a possible buy signal.  The reversal is about 1 week early, so there may be a back-test of the reversal in the next week.  The Bank of Japan and the Bank of England are showing stress, which may strengthen yields in the UST.

USD futures continue to climb toward the 50-day Moving Average, above which lies a potential buy signal.  The Cycles Model shows growing strength in the rally that may continue to mid-October.  Further advancement may not only overcome the 50-day, but also break out of the 5-month declining trend channel.

BKX made a new all-time high yesterday and may be pulling back today.  The Cycles Model shows the Master Cycle is fully extended and due for a reversal.  In addition, volatility may appears on Monday, strengthening the reversal.  The Model shows a decline is in the offing that may last to late October.

ZeroHedge observes, “Did a medium-sized canary just croak in the coalmine of consumer credit?

While the world and his pet rabbit was avidly glued to the screens, hanging on every word from Fed Chair Powell, something happened in a name that few have likely heard of that could have a much greater impact on 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.

9:00 am

Good Morning!

SPX futures rose to 6659.70 “on news that Nvidia will invest $5BN in Intel at $23.28 per share.”  Yesterday’s dip was shallow enough to allow a new all-time high this morning.  The Cycle Top resistance lies at 6678.56, which imposes a possible upper limit on the rally.  Dealers may be motivated to bring SPX futures down beneath long gamma at 6620.00, or face having to buy shares in an overcrowded, overbought market.  This may  complete the bullish fractal and allow a deeper correction.  The Cycles Model May allow another week of rally, but SPX has entered its turn window, allowing a reversal forthwith.  A decline beneath the trendline and Intermediate support at 6450.00 offers a sell signal.

Today’s options chain shows Max Pain at 6600.00.  Long gamma becomes dominant above 6620.00 while short gamma reigns beneath 6590.00.

ZeroHedge reports, “Futures are higher and back into record territory as investors shrug off some contradictions in the Fed’s policy statement and Powell’s hawkish news conference and refocus on the most dovish Fed statement since 2021, per JPM. “For whatever reason, it appears the Fed’s reaction function has shifted in a more dovish direction,” according to Bloomberg Econ head Anna Wong. S&P 500 futures were 0.8% higher at 8:05 am ET while Nasdaq 100 futures were +1.1%. Pre-mkt, Mag7 / Semis are bid up with NVDA +2.3%, AVGO +1.9%, TSLA +1.6%, GOOG +1.3%; tech was boosted by news that NVDA would buy a $5BN stake in rival chipmaker Intel.  Nikkei +1.15%, Hang Seng -1.35%, Shanghai -1.15%, FTSE +15bps, CAC +1.1%, DAX +1.2%. “Last night the market was taking the view that this wasn’t so much of a dovish cut but, after sleeping on it, it decided that it was enough to keep the market going,” said Karen Georges, an equity fund manager at Ecofi in Paris. “Fed cuts are good for tech and long duration stocks.” Sure enough, both tech and small caps are outperforming as the US is poised for an “Everything Rally” alongside a global risk-on tone. The yield curve is bull flattening and USD is flat. Large-Caps across all the super-sectors are higher pre-mkt. Today’s macro data focus is on jobless claims where investors will look to confirm last week’s spike was a one-off.”

VIX futures corrected down to 14.33 this morning, possibly completing its two-week correction.  What may follow is a breakout above the 4-month trading channel that has been bouncing off the “floor” of the VIX trading range.  This action may offer a n opportunity to accumulate hedges against what may follow.

TNX is challenging the Triangle formation trendline after a strong reversal out of a possible Master Cycle low on Wednesday.  The trendline lies between 41.10 and 41.20.  A rally above that level confirms a buy signal for TNX (a sell signal for UST).  Should the rally continue, investors may become less confident in equities.  Meanwhile, money flows into commodities suggest a rising concern about inflation.

Bitcoin resumed its rally, but remains overbought.  There are approximately two weeks left in the current Master Cycle, leaving open the option of going higher.  The Cycles Model allows Bitcoin to advance to the Cycle Top resistance at 128546.10.  However, Bitcoin has reached the 61.8% Fibonacci retracement value this morning, suggesting a possible early reversal.

USD futures are climbing toward the 50-day Moving Average at 97.98, above which a buy signal may be obtained.  The USD reached its Master Cycle low on Wednesday, making a very strong reversal.  The Cycles Model infers a probable rally to mid-October.  During that time, the USD may break out of its declining trend channel, defined by the trendline at 99.00.

Gold futures may have reached their Master Cycle high yesterday at 3705.71.  Since then it has been in a sharp decline.  This action offers a possible aggressive sell signal.  Unfortunately, it may not be confirmed until gold declines beneath Intermediate support at 3454.89.  The Cycles Model may allow the subsequent decline to last until mid-November.  This infers a possible decline to the Cycle Bottom at 2602.32.

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.

10:30 am

The Ag Index is due for a correction alongside stocks, but may not have the depth of decline that may be expected in stocks.  A possible target may be the Cycle Bottom at 338.00.  This decline may offer an opportunity to accumulate shares of agricultural commodities.

ZeroHedge observes, “Arabica coffee futures have soared over the past six weeks, reaching their highest level since February as traders closely monitor tightening supplies, adverse weather conditions in Brazil and other top growers, and uncertainty surrounding upcoming harvests, which has fueled a short squeeze.”

ZeroHedge further notes, “The best bang for the buck in the grocery store protein aisle this year hasn’t been beef, it’s been eggs. Prices have plummeted thanks to President Trump’s swift action to fix the Biden-Harris regime’s botched bird flu culling disaster. By contrast, ground beef has surged to a record $6.32 per pound, squeezed by the smallest US cattle herd in decades, with a bleak outlook despite some signs of a rebuilding phase nearing.”

8:45 am

SPX futures consolidated beneath yesterday’s high, waiting for the FOMC announcement.  The Cycles Model offers two possibilities today, both start with a decline.  The first option may be a decline beneath the 50-day Moving Average at 6393.59, reaching possible support near the mid-Cycle support at 5986.22.  That option leaves the door open for a subsequent new all-time high in October.  The second option may be a deeper, panic decline to the April 7 low, leaving a possible retracement in October, with no new all-time highs.   The reason for the second option is that the Cycles Model projects several days of volatile strength starting next week.  In addition, the panic decline may extend into earnings season in early October.

Today’s options chain shows Max Pain at 6610.00.  Long gamma resides above 6625.00 while short gamma dominates beneath 6590.00.  Options are on a hair trigger.

ZeroHedge reports, “US equity futures are flat into today’s Fed decision, with the long end of the yield curve moving lower. As of 8:10am ET, S&P and Nasdaq futures are down 0.1%, with Nvidia lower in premarket trading after the FT reported that China has ordered some companies to terminate orders for a certain type of AI chip (AMD -1%, AVGO flat). Other Mag7 names are flat. Cyclicals are under pressure. In other assets ahead of the Fed, the dollar is near its lowest level in three years although it is catching a bid after losing nearly 1% the last two days, while gold held near a record high. The commodity complex is weaker with notable losses in silver and coffee, each down more than 2.2%. In addition to the Fed today, we also have Housing starts and building permits ahead of tomorrow’s jobless data.”

VIX futures remain above the 50-day Moving Average this morning.  The leap above the 50-day yesterday gave the VIX an early buy signal.  Most analysts may recognize the buy signal above the declining trendline near 20.00.  The Cycles Model suggests a rally may be imminent, with trending strength emerging next week.  The current Master Cycle may extend into earnings season in October.

TNX is drifting lower as the FOMC announcement approaches.  The Cycles Model suggests that the current decline may last to the end of September with rising volatility.   A .25% rate cut may already be “cooked in,” but investors may pay attention to dissenting voices in the FOMC.  A further decline next week may be due to the potential loss in confidence in the economy, motivating investors to switch to bonds, a traditional “safe haven.”  The wording in the FOMC statement may be studied carefully for nuances.

ZeroHedge reports, “After 3 stellar coupon auctions last week, with 10Y yields trading effectively at the lowest level since last October (excluding the Liberation Day basis trade freak out) , and with the Fed set to cut by at least 25bps, there was little anxiety ahead of today’s 20Y coupon auction. And with good reason: moments ago the day’s coupon auction, a reopening of the 19-Year, 11-Month cusip UN6, went without a glitch in what was a very solid auction. ”

Bitcoin futures remain above the 50-day Moving Average at 114500.00.However, it is overbought and susceptible to weakness.  Should it decline beneath the 50-day, there could be trouble for the longs.

USD futures may have made their Master Cycle low yesterday.  Should that be so, the new Master Cycle may be on the rise to mid-October.  Should that be so, a breakout of the declining channel may occur in the next week.  The Master Cycle projects the new trend to last to mid-October with rising strength.  A potential target may be no less than the mid-Cycle resistance at 101.58.

Gold futures rose to 3732.80 yesterday, hitting a new all-time high.  Likewise, the CME price may have also topped out yesterday in an extended Master Cycle.  The Cycles Model suggests a decline may ensue, lasting to mid-November.  The decline may begin to accelerate next week, with volatility peaking at month-end.

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.

10:20 am

BKX may have hit its all-time high on Monday at 152.51.  It has since reversed, although no signal has been given.  A confirmed sell signal may emerge at the decline beneath the 50-day Moving Average at 145.43.  Should the decline materialize, it may not conclude until the end of October.

8:00 am

Good Morning!

SPX futures rose to 6634.70 this morning before easing back, remaining above yesterday’s high.  The rally may be in its end stage and due for a corrective decline to the end of the month.  What happens after may depend on the depth of the correction.  The FOMC decision on rate cuts may not be the only catalyst for the decline, although expectations for a deep cut run high.  NDX has had a 10-day run of gains as of yesterday.  The all-time record, I believe, was 13 days.

Today’s options chain shows Max Pain at 6600.00.  Long gamma rises above 6630.00 while short gamma dominates beneath 6575.00.

ZeroHedge reports, “US equity futures are higher (duh) outperforming global counterparts, while the Nasdaq is on pace for a historic 10th day of gains. As of  8:00am ET, S&P and Nasdaq 100 futures were higher by 0.2% with Oracle rising more than 5% in premarket trading on news it may soon be handed control of TikTok. S&P 500 contracts edged higher after the US benchmark powered through the 6,600 mark on Monday. Pre-mkt, Mag7 is displaying strength across multiple members with add’l TMT support from AVGO (+1.4%) and ORCL (+3.7%). Cyclicals and Semis are poised to lead but with pockets of strength in Defensives (HC, Staples) also seen. Europe’s Stoxx 600 fell 0.2%. Bond yields are flat to down 1bps with the US Dollar broadly weaker ahead of a widely expected 25bp cut and the resumption of the Fed’s easing cycle which paused in Dec 2024 (right after Trump was elected). US Treasuries have been racing past peers, the euro is nearing four-year highs and Goldman strategists caution that the next pain point for bond traders may come in the five-year part of the curve.  Both Cook and Miran will be a part of the vote. Today’s macro data focus is on Retail Sales where Feroli is below the Street seeing a 0.1% MoM print and 0.3% for the Control Group.”

VIX futures are consolidating beneath the 50-day Moving Average at 15.92 this morning.  The 50-day may be a trigger point for a buy signal in the VIX.  Investors are selling SPX puts in an effort to derive a profit from the collapse in volatility.  This extreme behavior is due to backfire very soon.

Tomorrow’s (monthly) options chain shows Max Pain at 18.50.  Short gamma rules beneath 16.00 while long gamma rises above 20.00.

TNX appears to be consolidating beneath the Cycle Bottom at 40.64.  The Cycles Model suggests a shot of strength may be due today.  How it manifests itself may indicate whether the decline continues lower, or an early reversal may be in the works.

ZeroHedge remarks, “In 2025, the mainstream Keynesian narrative that the United States would inevitably experience a recession and stagflation has proven to be utterly incorrect.

The American economy is performing much better than its comparable nations, is showing broad-based strength, and even has indications of accelerating growth, giving investors and consumers plenty of reason to feel more optimistic, despite the consensus estimates from earlier in the year.

The consensus was wrong.”

BTC managed to break above the 50-day Moving Average at 114570.00, but is currently in overbought territory.  The Cycles Model opens the door to a 3-week decline that, should Bitcoin decline beneath the 50-day, it may test the mid-Cycle support at 104223.95, or possibly lower.

USD futures may be due to reach their Master Cycle low within the next day or two, as projected.  Be aware that this may have ramifications across the board.  The Cycles Model suggests the reversal may be imminent, with a possible rally in the USD to mid-October.

Gold futures overshot the Cycle Top resistance at 3704.00, reaching a high at 3737.00 this morning.  It may be in the final stage of its extended rally.  A reversal beneath the Cycle Top support/resistance may signal a change in trend.  The Cycles Model suggests a decline may ensue to mid-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.

8:00 am

Good Morning!

SPX futures rose to 6600.10 thus far, testing Friday’s high at 6600.21, which is round number resistance.  Last week hedge funds become buyers of AI after the CPI print.  Meanwhile, this week stock buybacks went into their blackout period.  The current Master Cycle may be due for a downside correction that, at a minimum, may test the 50-day Moving Average currently at 6378.27.  A warning that the decline may undershoot the mean (50-day) infers a possible further decline to the mid-Cycle support at 5980.28.  In other words, the SPX is so far extended that a simple “reversion to the mean” may not be sufficient to relieve the overbought condition.  The week of September 22nd may be particularly brutal.  The 1987 trendline at 5800.00 may be another possible target for the correction.  The Cycles Model suggests the correction may last to the end of September.

Today’s options chain shows Max Pain at 6575.00.  Long gamma resides above 6600.00 while short gamma strengthens beneath 6550.00.

ZeroHedge reports, “Equity futures are at fresh record highs, erasing a modest dip earlier in the session when a probe found that Nvidia violated anti-monopoly laws in China in a 2020 deal. That killed the mood at the start of a big week, with the Fed expected to make the first of a series of rate cuts, however the mood was promptly lifted again just after 6am ET when Elon Musk bought $1BN in TSLA stock sending the market cap soaring by over $100BN and lifting stocks to new all time highs. As of 8:00am ET, S&P 500 futures and Nasdaq 100 futures were higher by 0.2%. In premarket trading, Nvidia shares fell as much as 2.9% after China said it violated antitrust regulations after its acquisition of Mellanox. The surprise announcement came as US and Chinese officials headed into a second day of wide-ranging negotiations in Madrid over tariffs. Mag7 names are mixed with AAPL, AMZN, and GOOG up 90bp-108bp; TSLA soared 8% after Musk purchased $1bn of stock, his first open market purchase since February 2020. European stocks advanced in a rally led by luxury shares. US / China trade talks enter a second day today. Commodities are mixed with Energy up and Ags / Metals down. Today’s macro data focus is Empire Mfg ahead of tomorrow’s Retail Sales and Weds’ Fed meeting.”

VIX futures rose to a weekend high at 15.31.  The 4-month period of calm may be broken this week, leaving investors unprepared and unhedged.  Note that the 50-day Moving Average is at 15.94, suggesting that hedges are still cheap.

The September 17 (monthly) options chain shows Max Pain at 18.50.  Short gamma rules from 15.00 to 18.00.  Long gamma dominates above 20.00 with institutional participation at every 5 points to as high as 80.00.

TNX may have been repelled at the Cycle Bottom resistance, suggesting another probe lower may be taking place.  Should that be so, additional strength may be imminent, lengthening the decline.  The Cycles Model suggests up to 2 weeks of additional decline before it hits bottom.  Note that the FOMC announcement on Wednesday may provide the impetus for an early reversal.  The market may be pricing in a .25% cut in September, rising to a .50% cut in October.

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!

SPX futures rose to 6551.50 and are hovering just beneath yesterday’s all-time high.  Trading volume is taking a pause as evaluate where the economy is tracking.  Yesterday’s deflationary PPI report cemented the odds of a .25% rate cut while the upcoming CPI report may “lock in” a .50% rate cut.  All of this comes to a head next Wednesday at the FOMC decision.  The Cycles Model offers no direction until the week after the FOMC, when the market heats up for the end of the quarter rebalancing.

Today’s options chain show Max Pain at 6530.00.  Long gamma may begin above 6550.00 while short gamma rules beneath 6475.00.

ZeroHedge reports, “US equity futures have a slight bid into today’s CPI print – the last key macro datapoint ahead of next week’s rate decision – rising to another daily record high, let by Tech. As of 8:10am, S&P futures rise 0.2% after back-to-back all-time highs while Nasdaq 100 futures rise 0.3% with AAPL and AMZN leading the Mag7 higher and ORCL +1.4% after its +36% move yesterday. In a familiar pattern this week, Cyclicals are outperforming Defensives pre-mkt. European stocks also drifted higher while Chinese stocks capped their biggest advance since March, led by companies seen as major beneficiaries of the nation’s push for homegrown technology. Treasuries held steady, with the 10-year yield at 4.05%; the USD is up small as the yen slumps after prominent LDP dove and conservative Sanae Takaichi said she is running for PM; commodities are seeing some profit-taking with both Energy and Metals lower. CPI and Jobless Claims are the focus for today as investors solidify views into next week’s Fed as well as Oct / Dec meetings.”

VIX futures dipped to 14.97 in the overnight market.  Yesterday’s low at 14.63 may have given a turning point for the VIX, as the fractal appears complete.

TNX futures hit a new low at 39.91 this morning, but pulled back presumably at the news of the CPI.  TNX has about two more weeks to go in the current Master Cycle, giving it the possibility of declining to the April 4 low.

ZeroHedge reports, “After yesterday’s remarkably strong 3Y auction, which in our view was one of the “top 3″ best 3Y sales in history, moments ago the US Treasury sold 10Y paper (in a 9-Year 11-Month reopening) in what may well be one of the “top 3″ 10Y auctions too.

Starting at the top, the auction priced at a high yield of 4.033%, down significantly from 4.255% last month, and the lowest since last September, when the market suffered another growth scare and the Fed ended up cutting by 50bps just a week after a similar 10Y auction priced. And just like the Sept 2024 auction, this one also stopped through the When Issued by a solid 1.3bps: this was the highest stop through since the market chaos in April.”

Bitcoin futures have stopped short of the 50-day Moving Average at 114787.00 this morning.  The Cycles Model proposes a possible three more weeks in the currnent Master Cycle which should allow it to exceed the 50-day.  However, the prospects of a new all-time high are diminishing.

USD futures are consolidating beneath their 50-day Moving Average at 98.89.  The Cycles Model allows another week of decline, which may test the lower trendline near 95.00.

Gold futures made a new all-time high at 3687.42 this morning in Master Cycle overtime, touching the Cycle Top at 3686.84.  The Cycles Model suggests this may be the final probe, as it hit its Cyclical target.  Caution is advised as

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.

10:20 am

BKX has made its Master Cycle high last Friday and is consolidating beneath it.   What is worrisome is that the new Master Cycle decline may extend to the end of October.   What is emerging is $1.3 trillion of CRE loans that need refinancing under rugged circumstances.  Last year’s $2.5 reverse repo facility is now at zero.  Difficult times lie ahead for regional banks.

8:15 am

Good Morning!

SPX futures made a new all-time high at 6540.10 this morning.  It may be in a correction phase which may allow a shallow decline similar to the January correction at any time.  While the main support is the 50-day Moving average at 6355.48, it may be possible that the mid-Cycle support at 5972.08 may be tested by the end of the month.  Meanwhile, the source of funds seems to be primarily from Europe as the prospects for a hot war are increasing.  Analysts are crediting Oracle for the bump in price.

Today’s options chain shows Max Pain at 6505.00.  Long gamma becomes strong above 6525.00 while short gamma may begin beneath 6500.00.

ZeroHedge reports, “US stock futures are trading at another record high, with European and Asian also pushing higher after Oracle underpinned the strong sentiment in tech with blowout guidance sending its shares up by 30% in premarket trading, while the market awaits inflation data today and tomorrow. As of 8:15am, S&P futures are 0.3% higher with Nasdaq futures rising 0.4%…”

VIX futures declined to 14.85 this morning, as SPX continues to rally.  However, today offers the possibility of a reversal with strength.  A bounce above the 50-day Moving Average at 16.04 may begin a sharp rally.  Today is options expiration, which may release some of the propensity for decline.

TNX futures are heading lower this morning.  The question, “Who benefits?” arises as the US government is the largest borrower in short-term loans.  Long term rates may be subject to inflationary pressures as government soaks up even more liquidity.

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 6516.20this morning, then settled back near 6500.00, leaving Friday’s all-time high intact.  The trendline is near 6475.00, beneath which a possible sell signal lurks.  The Cycles Model suggests a possible decline to the end of the month.  Should that be so, the April 7 bottom is a likely target.  Institutions are on the sidelines to the end of the quarter while hedge funds are reducing leverage.  Commercials and individual investors may be maxed out at this level.   The breakaway decline may gain strength by the end of the week.  A possible panic Cycle  may emerge the week of the 22nd.

Today’s options chain shows Max Pain at 6485.00.  Long gamma exists above 6500.00.  Short gamma lies beneath 6450.00.

ZeroHedge reports, “Futures are higher led by Tech as expectations of Fed rate cuts continued to drive gains, while Treasuries eased after a rally that pushed global bonds into bull-market territory ahead of what is set to be another huge negative benchmark revision to payrolls. As of 8:30am S&P futures are 0.1% higher, while Nasdaq futures gain 0.2% as Mag7 stocks see a muted bid with AVGO/NVDA leading Semis higher. Both Cyclicals and Defensives have caught a bid with Materials buoyed by the Anglo / Teck deal. The yield curve is bear steepening as 10Y yield rise by 2bps to 4.07%; the dollar slid for a third day, with the yen driving advances among major currencies on renewed signals of policy tightening by the Bank of Japan. Commodities are higher with broad-based strength across all 3 complex but notable increases in crude, natgas, coffee, and iron. Today’s macro data focus is on the NFP revision with BBG survey seeing a 700k negative revision to payrolls and the modest beat in the NFIB Small Business Optimism (100.8, vs Exp. 100.5) where the Hiring sub-index has been a leading indicator for future NFP prints.”

VIX futures are consolidating beneath the 50-day Moving Average at 16.07.  A good place to accumulate shares.

Tomorrow’s options chain shows short gamma strongly beneath 14.00 while long gamma kicks in above 15,00.  Large investors are starting to nibble at long positions in the 40.00-50.00 range.

10-year Treasury futures are bouncing from yesterday’s low, but may be held down at the Cycle bottom at 40.94.  The Cycles Model suggests the decline may exceed the April 4 low.  Money flowing into bonds may accelerate over the next three weeks.

Gold futures hit a new all-time high at 3698.52 in the overnight market.  The CME (cash market) may be struggling near 3600.00 at the same time.  Round numbers give a high resistance quotient and may be the end of the rally in gold, just as sentiment and participation reach a fever pitch.