The Practical Investor

3:05 pm

SPX has just crossed the lower trendline of the 4-month Ending Diagonal at 5970.00.  This is a confirmed sell/sell short signal.  SPX is now treading at November levels.  This is serious.

2:08 pm

SPX is now making a new low beneath short-term support.  This creates an aggressive sell signal.  Confirmation lies beneath Intermediate support at 5984.57.  Take appropriate action.

8:00am    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.

Good Morning!

SPX futures rose this morning to 6067.60 thus far.  Resistance lies near 6085.00 while support lies near 6030.00.  Institutions (the Fed?) often buy futures in the premarket to attract retail buyers who fear missing out.  Their positions are often taken off by the end of the day, leaving retail investors for better or worse.  The all-time high in the DJIA and SPX remains at December 6.  There are approximately two weeks left in the current Master Cycle which may go either way.  Let’s turn to today’s Fed decision.  .According to the market, there’s a 95% chance. That will bring the fed funds target range down to 4.50%-4.25%, the Fed Funds rate to 4.33%, and GC between 4.40% and 4.35%.  If so, it may be the last cut.  However, we may see rate increases as early as January, due to Yellen’s overemphasis on auctioning off T-bills rather than notes and bonds to artificially keep rates low.

Today’s options chain shows Max Pain at 6070.00.  Long gamma becomes strong at 6100.00 while short gamma may begin at 6030.00.

ZeroHedge reports, “US equity futures and global stocks rebounded on Wednesday as investors awaited the Fed’s final policy decision of the year, where the US central bank is widely expected to cut 25bps. As of 8:00am, futures for the S&P 500 advanced 0.3%, on pace for their 58th record high of the year, while Nasdaq 100 futs rose 0.2% after both indexes fell on Tuesday. We are seeing some momentum reversions early with TSLA (-2.5% pre mkt after closing at a new ATH yday) and NVDA (+2.7%) the standouts on light news. The Stoxx 600 was set for its first day of gains in five sessions, while Asian equities also gained, snapping a three-day losing streak (FTSE +20bps, CAC +40bps, DAX +40bps, Nikkei -72bps, Hang Seng +83bps, Shanghai +62bps). US treasuries dropped, the yield on the 10Y TSY rising 2bps to 4.41% as the dollar index also gained, as did oil, with WTI rising 0.6% to $70.51. Elsewhere, Bitcoin slid 1.55% to $104,740 as global equities chop around ahead of FOMC this afternoon (consensus expects 25bps cut and messaging of slowing pace of cuts going forward, full preview here). If that wasn’t enough, tomorrow we also get BoE/BoJ. On today’s macro calendar we get housing start and building permits, but the highlights is the 2pm FOMC decision and 2:30pm Powell press conference.

SPX breadth peaked on the 29th of November and has been heading down since then, despite the expectation of a .25% rate cut.  There is a lot of selling under that rosy exterior.

VIX futures have eased back, from yesterday’s high at mid-Cycle resistance at16.05, to 15.27 this morning.  The pullback may be short-lived, as trending strength is due to arrive by the end of the week.

While today’s options chain is closed to new investors, there is a huge open interest at the 60 call strike today.  A large buyer may have sneaked under the wire to place that order in the pre-market.

TNX is consolidating after yesterday’s run-up.  There is a possibility of retesting Intermediate support at 43.21.  Otherwise the trend continues higher.   There is no indication of a rate cut ing the Cycles Model.  However, we cannot rule it out.

10:00

BKX, our liquidity proxy, may have slipped beneath the trendline at 131.00 this morning.  If so, the decline may resume, with an occasional bounce, through the end of the year.  Even more bearish would be a bounce to the year-end, since the next Master Cycle may contain a further decline.

7:30 am    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.

Good Morning!

The US 30 Cash futures (DJIA) declined this morning beneath the upper trendline of its year-long Ending Diagonal formation at 43700.00.  It formed a double top above its trendline (throw-over) and made its final peak on December 6.  You may ask, “Wait a doggone minute!  Where is the rally?”  Your eyes are not fooling you.  The DJIA has been in decline since December 6 and has made a morning low at 43545.00, approaching its 50-day Moving Average at 43375.00.  Yesterday its sell signal has been confirmed at Intermediate support at 43783.66.  It is at an important pivot point.  Either the DJIA joins it Tech brethren in a rally to the end of the year, or it resumes its decline to the end of the year. Choose wisely.

SPX futures declined to 6054.20 thus far this morning.  It remains on an aggressive sell signal this morning.  Further confirmation lies at its short-term support at 6038.56.  The SPX is caught between the Blue Chips and Tech in a no-man’s land of non-performance, neither up nor down.  The markets have reached a Cyclical pivot point.  In the next two days a directional decision may be made.  The Cycles Model infers that, whichever way it turns, it will be with strength.  The current Master Cycle has a possible three weeks in which to run that decision.

Today’s options chain shows Max Pain at 6070.00.  Long gamma kicks in above 6100.00.  Short gamma may begin at 6050.00 and strengthens beneath 6030.00.

ZeroHedge reports, “There is only so much the US can “exceptionally” decouple from the rest of the world, and on Tuesday US futures finally succumbed to the persistent selling in markets around the world, as traders awaited the Federal Reserve’s final interest-rate decision for 2024 and its monetary policy forecasts. As of 8:00am, S&P futures dropped 0.3%, while Nasdaq 100 futs eased back 0.2% after the relentless rally in tech stocks pushed the gauge to a fresh all-time high on Monday as AAPL/GOOGL/AMZN/TSLA/AVGO all reached new ATHs. TSLA (+3% pre-mkt) on an u/g away while NVDA (-1.5% pre mkt) continues to be under pressure. Europe’s Stoxx 600 fell 0.4% as weaker crude prices weighed on oil-related stocks (FTSE -70bps/DAX +15bps/CAC +30bps). A key Asian gauge dropped 0.5% after erasing gains as concerns over China’s economy persist (Shanghai -73bps/Hang Seng -48bps/Nikkei -24bps). US rates rose with 10Y TSY yields rising +4bps @ 4.43%. The Bloomberg Dollar Spot Index adds 0.1%. The Aussie dollar is the weakest of the G-10 currencies, losing 0.5%. The yen outperforms with a 0.2% gain. Crude oil extended its drop as WTI dropped 0.8% to $70.15. Meanwhile, Bitcoin adds another +90bps to $107,040 as global equities chop around ahead of a slew of central bank rate decisions the next few days (FOMC tomorrow). There is a busy macro calendar today with retail sales, industrial/mfg production, business inventories and the NAHB housing index all on deck.”

NDX futures declined to 22009.60 thus far this morning.  It is out on a limb (Cycle Inversion) with the nearest support being the Cycle Top at 21667.34.  It is also losing internal strength as the Magnificent Seven (70%of all trading volume) may have whittled down to the Magnificent Two.  NVDA, the bellwether of these leaders, has declined beneath its 50-day Moving Average and is on a confirmed sell signal.  I am stating facts, not giving investment advice.  NDX is at a pivot point from which it may finish off the year.  This is not a good place to hitch your retirement plan.

Today’s options chain shows Max Pain at 22060.00.  Long gamma resides above 22080.00 while short gamma appears to be scarce.  This one-sided optionality may be courting disaster.

IBD reports, “Dubbed the Magnificent Seven stocks, Apple, Microsoft, Google parent Alphabet, Amazon.com, Nvidia, Meta Platforms and Tesla lived up to their name in 2023 with big gains. And all of them boasted solid year-to-date gains in the final month of 2024.

Due to their outsized market capitalizations, Magnificent Seven stocks hold a disproportionate influence on the market-cap weighted Nasdaq composite and S&P 500 indexes.”

VIX futures have risen to a morning high at 15.22.  It is on a confirmed buy signal above its 50-day Moving Average at 14.07.  The Cycles Model may be confirming an upside panic in the VIX developing this week.  Should it occur, the panic Cycle may last until early January.

The December 18 options chain shows Max Pain at 17.50.  Short gamma resides between 13.00 and 17.00.  Long gamma begins at 18.00 and shows strong support to 60.00.  Do those out-of-the-money longs know something we don’t?

TNX rose to a morning high at 44.34 before pulling back in a brief consolidation. The Cycles Model calls for a surge of trending strength beginning today and lasting through the year-end.  Don’t underestimate this rally, as it may break through the Cycle Top resistance at 47.55.  T-bill issuance is likely to fall with the new administration.  With it, liquidity provided by T-bills being recycled in RRP, providing further liquidity for the markets, is likely to dry up.

The Shanghai Composite has decline today to 3357.77, closing beneath Intermediate support at 3363.90.  The sell signal is confirmed.  The Cycles Model suggests the decline may strengthen by the week-end, creating a possible panic decline.   This decline appears to be in place through the end of January.

FEZ (ETF for EuroStoxx 50) has had a brief spurt of strength before reversing back down today.  This may be misleading, as analysts are calling the recent bounce a “tailwind” and peak bearishness is behind us.  Unfortunately, not.  The Cycles Model shows the decline resuming through the end of January.

Gold futures fell through its 50-day Moving Average on Friday.  Yesterday it retested its 50-day at 2683.73, closing beneath it.  Today it has decline further to 2646.19 thus far.  The Cycles Model calls for a continued decline until the year-end.  A potential panic may develop by the weekend.  Analysts have moved the red line from the 50-day to the hundred day Moving Average at 2610.00.  You can see that major support has already been broken.  The Cycles Model infers a much deeper decline.

Crude oil futures have declined beneath the 50-day Moving Average at 70.35 yesterday and today it has plummeted beneath Intermediate support at 69.31.  The Head & Shoulders neckline lies at 68.55.  The Cycles Model suggests the decline may continue beyond Christmas, leaving crude oil at new lows.

USD continues its rally, reaching a new high at 107.08.  Today, the USD is primed for a double shot of strength as it continues to rally into the year-end.

10:40 am

BKX is testing its upper trendline at 131.00 for support.  Should it hold, the banking index may bounce to its Cycle Top at 135.05 by year-end.  However, a break of the trendline may bring BKX considerably lower by  year-end.

8:00 am   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.

Good Morning!

SPX futures rose to 6066.10 this morning, bouncing off Short-term support at 6029.00.  SPX has gone sideways since it made its all-time high on December 6.  While corporate analysts project a new all-time earnings record for 2025, their estimates may be as much as 30% off their actual mark.  Current indications are the economy is slowing, raising the risk of an earnings slowdown that may leave investors high and dry.  The Cycles Model is not based on corporate earnings, but on human behavior.  A note of caution is in the air.  telling us that, after 4.3 months of nonstop growth, the chance of error is rising.  What can possibly go wrong?  This week may bring clarity  as the Cycles Model calls for a decline.

Today’s options chain shows Max Pain at 6050.00.  Long gamma may begin above 6075.00 while short gamma lurks beneath 6040.00.

ZeroHedge reports, “The last full week of 2024 started off with a burst of US exceptionalism which helped US equity futures shrug off downbeat performances in other global markets as traders prepared for a slate of interest-rate decisions by major central banks due later this week. S&P and Nasdaq futures both traded at record high, as did Bitcoin which hit a fresh all-time high of $106,000. As of 8:00am ET, S&P futures were 0.3% higher and Nasdaq futures gained 0.5% as the panic chase of momentum, which pushed the index at an all-time high on Friday, continued. MicroStrategy advanced more than 6% in premarket trading, fueled by its pending inclusion in the index following the software maker’s transformation into a leveraged bet on Bitcoin. Monday’s US stock performance stands in stark contrast with broad losses in Asia and Europe as weaker-than-expected retail data in China weighed on sentiment. A contraction in the euro-area’s private sector also dragged on European equities. Treasuries climb, pushing US 10-year yields down 2 bps to 4.38%. The Bloomberg Dollar Spot Index falls 0.1%. Oil dipped with WTI falling 0.9% to $70.60 a barrel. Today’s key macro events are the Empire Fed Manfuacturing index and S&P Global PMI prints for the US.”

VIX futures have risen to a weekend high at 14.40, above the 50-day Moving Average at 14.23.  This gives the VIX buy signal.  The Cycles Model called the Master Cycle low on December 6.  Since then its has risen to the 50-day, but not exceeded it until this morning.  While VIX has been consolidating until now near its floor, the VIX Volatility (VVIX) has been steadily rising, suggesting internal turmoil.  At the same time, speculators have been running big shorts on the VIX.  They are chasing nickels on the downside while the real dollars may be on the upside.

Wednesday’s options chain shows Max Pain at 17.50.  Short gamma is heavily lodged between 13.00 to 17.00.  Long gamma may begin above 118 and is attracting large positions up to 60.00.

NDX futures have reached a marginal new high (above Friday’s high at 21886.74), reaching 21896.60 this morning.  NDX has been finding support at its Cycle Top at 221607.98 thus far.  This raises the possibility of the NDX continuing its panic momentum until the end of the year.  However, note that only 5 companies have been pulling the weight of the NDX.

RealInvestmentAdvice observes, “Understanding the trajectory of corporate earnings is crucial for investors, as these earnings significantly influence stock valuations and market performance. Economic indicators such as Gross Domestic Product (GDP), the Institute for Supply Management (ISM) Manufacturing Index, and the Chicago Fed National Activity Index (CFNAI) provide valuable insights into the economic environment that shapes company profitability. These indicators can also help investors evaluate whether Wall Street’s earnings estimates are realistic.”

Bitcoin has exceeded its December 6 all-time high this morning.  It is now sporting a double top that may extend over the next week.  Since Bitcoin is an international speculator’s haven, it may be indicative to money exiting other countries as well as a touch of speculative fever domestically.  Please note the charts below.  Speculative fever may take Bitcoin to 110000.00 to 112000.00.

12:30 pm

ZeroHedge remarks, “Bitcoin’s price rallied almost 5% over the weekend to set a new all-time high above $106,000 amid speculation that it may become a United States reserve asset.

CK Zheng, chief investment officer of ZK Square, told Cointelegraph that Bitcoin has likely entered “Santa Claus mode,” as many investors fear missing out and look to allocate more capital into the asset class.”

2:20 pm

ZeroHedge explains, “Last October, when we pointed out that China’s FX outflows had just hit a whopping $75BN – the single biggest monthly outflow since the 2015 currency devaluation – we concluded that the “unfavorable interest rate spread between China and the US will “likely imply persistent depreciation and outflow pressures in coming months”, or in other words, September’s biggest FX outflow in years is just the beginning, and very soon – in addition to geopolitics and central banks – the world will also be freaking out about the capital flight out of China… not to mention where all those billions in Chinese savings are going and which digital currency the Chinese are using to launder said outflows.”

The Shanghai Composite has fallen beneath its Cycle Top at 3468.22 on Friday.  Today is slipped a bit lower as it is on a Cyclical sell signal.  The 50-day Moving Average at 3335.12 is a universally recognized support level, implying a sell signal beneath it.  Should SSEC fall beneath that level, we may see liquidity moving from China to Bitcoin as a safe haven.

FEZ (ETF of the EuroStoxx 50) decline to 49.59 thus far today, beneath its 50-day Moving Average at 49.92 today.  This implies a sell signal may have been recognized by European investors.  Europe has no tech sector, so the NDX may be logical choice for European investors.  Bitcoin may also be considered a haven.

ZeroHedge reports, “Europe is disintegrating as legacy political regimes are collapsing over across the world.

Just one week after Marine Le Pen precipitated the collapse of the French government, on Monday, Chancellor Olaf Scholz lost a confidence vote in the German Parliament on Monday, a defeat that effectively ended the increasingly unpopular government he has led since 2021 and ushered in elections early next year.

German lawmakers voted to dissolve the existing government by a vote of 394 to 207, with 116 abstaining.”

TNX is consolidating beneath Friday’s high at 44.03, having decline to 43.61 this morning.    It may pull back to Intermediate support at 43.13.  However, the Cycle Model suggests a burst of trending strength awaits TNX as early as tomorrow.  The current Master Cycle continues its upward surge through early January.  The next target may be the Cycle Top at 47.53.

1:00 pm

SPX has fallen through short-term support at 6040.00.  The next support lies at 5957.21.  The Cycles Model does not anticipate a significant bounce until Fed day (Wednesday).

7:45 am    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.

Good Morning!

SPX futures have bounced this morning to a high at 6074.20 thus far.  The Cycles Model suggests the bounce may be over this morning.  If so, the stage may be set for a week-long decline.  Recall that the all-time high was made a week ago.  After Tuesday’s decline, the SPX has done little more than go sideways.  Thursday’s day of strength was to the downside, which suggests a possible change in trend.  If the Model is correct, the bounce may not make a new high.  On the other hand, equity forecasters are positive of new highs.

This morning’s options chain shows Max Pain at 6065.00.  Long gamma may begin at 6075.00 while short gamma may start beneath 6030.00.  You can see that the SPX moves have been guided between the gamma clusters.

ZeroHedge reports, “US equity futures pointed to a strong end to the week, as a premarket surge in Broadcom powered gains across the entire chip and tech complex, even as European bourses dipped and Asian markets took it on the chin after the latest Chinese stimulus disappointment. As of 8:00am S&P500 futs gained 0.4%, and Nasdaq 100 futures rose 0.7%, with shares in Broadcom surging 15% after it predicted a 65% increase in sales of AI chips in the fiscal first qtr; if gains holds, the stock will hit a record high, inching closer to a $1 trillion market cap. Peers Marvell, Micron, Nvidia and Advanced Micro Devices also rose. US 10Y yields gained 3bps rising to 4.35%, highest since Nov. 25; the dollar reversed earlier gains with the euro bouncing after Macron named centrist Bayou as the new French PM. Crude oil futures rose to a weekly high. On tap today we have US Import/Export prices (8:30am ET), Eurozone + UK Industrial production, Japan Industrial production”

NDX futures made a new all-time high at 21820.70 this morning.  Despite the appearances of healthy momentum, the new high was made by a very limited number of stocks.  Broadcom’s surge was accompanied by Marvell, Micron, Nvidia and Advanced Micro Devices.  What started this summer as the Marvelous Seven is now only five stocks.  Those owning these stocks participated in the rally.  Others did not.  NDX is in s throw-over formation which  is due for a reversal.

VIX futures have pulled back to 13.37 this morning, thereby completing its correction of the first probe from the low.  The Cycles Model suggests the launch of the next phase higher in strength today.  The 50-day Moving Average is at 14.36.  Will the VIX move above the 50-day?  Watch closely, as that will indicate a new buy signal.

The December 18 options chain shows Max Pain at 17.00.  Short gamma resides between 13.00 and 16.00.  Long gamma begins at 18.00 and is well populated to 55.00.  There is a growing concern about the equities valuations among options investors.

Bitcoin is consolidating beneath yesterday’s secondary high.  The Cycles Model suggests more than a week of decline before a bounce.  A lot of damage can be done in that short period.  While the Cycles Model has given an aggressive sell signal thus far, serious downside risk appears beneath the Cycle Top and Intermediate support at 95513.48.

TNX futures have risen to 43.55 overnight, while the cash market has risen to 43.46 thus far.  Yesterday’s day of strength broke TNX above its Intermediate support/resistance at 43.08.  The path is clearly higher with a month to go in the current Master Cycle.

Yesterday ZeroHedge observes, “After a solid 3Y auction on Tuesday and a stellar 10Y yesterday, moments ago the Treasury concluded the week’s coupon issuance with a decidedly soggy 30Y auction, one which pushed yields to session highs.”

Gold has slipped beneath the trendline at 2700.00 and the 50-0day Moving Average at 2684.00 to create a sell signal.  The Cycles Model offers a two-week decline for gold that may challenge the mid-Cycle support at 2491.38.

12:45 pm

Correction:  This morning I mentioned that Bitcoin had made its secondary high yesterday at 101979.09.  Instead, it made its retracement high this mid-day at 102598.04.  The balance of this morning’s report is largely correct.

12.25 pm

BKX is hovering just above Intermediate support at 131.87.  It is beneath the Cycle Top at 134.48.  It is due for a bounce.  Should it rise above the Cycle Top resistance, it may go to the 61.8% Fibonacci retracement at 136.81 or higher by year-end.  Should it be repelled at the Cycle Top and decline through Intermediate support, it may resume its decline to lower (unspecified) levels.

7:20 am 

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.

Good Morning!  This will be a short blog as I am leaving for a breakfast appointment.  I may return for further commentary after the open.

SPX futures have declined to a morning low of 6071.60 after failing to make a new ATH.  It remains beneath the Cycle Top as well, indicating that investors should be lightening their positions.  Should yesterday’s close remain, SPX may begin its descent.  Short-term support is at 6023.00, reinforcing the aggressive sell signal.  Intermediate support is found at 5944.42, giving a confirmed sell signal.

Today’s options chain shows Max Pain at 6080.00.  Long gamma may begin at 6090.00.  Short gamma lies beneath 6070.00.  The options market are tightly wound for a big move.

ZeroHedge reports, “US equity futures and European bourses trade lower as bond yields rise 2-3bps across the curve as Treasury yields rose ahead of the Fed’s policy meeting next week and ahead of today’s ECB rate cut (preview here). As of 8:00am ET, S&P futures are down 0.2% and Nasdaq futures slide 0.4% after disappointing guidance by Adobe sent the stock tumbling, even though pre-mkt, Mag7 names are mostly higher led by GOOG/TSLA, but Tech overall is lagging after the Nasdaq set a new ATH yesterday. Both indexes made strong gains on Wednesday, when an in-line US inflation print cemented swap markets’ expectations of a a quarter-point rate cut at the Fed’s Dec. 17-18 meeting. The USD is weaker and commodities are mostly bid led by energy, Ags, and base metals. Banks are weaker despite positive reports at an industry conference. Today’s macro focus is on PPI (Core exp. 0.2% MoM, 3.2% YoY) and Jobless Claims (exp. 220K).”

VIX futures are consolidating mid-range in yesterdays trading.  While the VIX is not yet on a buy signal, the VIX of VIX (VVIX) id now on a buy signal, suggesting large players may be buying the VIX futures and options.  The Cycles Model also indicates a surge of trending strength by the weekend.

9:46 am

Bitcoin put in its secondary high yesterday at 101979.09 at the 4.3 month interval in the Cycles.  Since then, it has consolidated above short-term  support at 97645.09.  It is on an aggressive sell signal, suggesting a lightening of long positions.  The next support is the Intermediate-term support at 94769.71, where a firmer/confirmed sell signal may be procured.  The Cycles Model suggests that a discernible low may be made in 1-2 weeks, followed by a correction heading into early January.  A “normal” Cyclical low on the initial decline may be the August 5 low at 49200.00.  This is a first for bitcoin, so there are no assurances of performance.

TNX is challenging Intermediate-term resistance at 43.05 as I write.  Today is a day of strength, suggesting the breakout above resistance may be accomplished.  The Cycles Model calls for three more weeks of rally in yields.  The potential targets for this rally are the Cycle Top at 47.50, then 50.00, followed by 53.00.  Today’s activities have thrown the bond market into confusion.

Yesterday, ZeroHedge wrote, “After yesterday’s solid 3Y auction, the market considered the results briefly, pushed yields lower for about a basis point and then saw the recent move wider in yields extend overnight, with some wondering if yesterday’s auction success would be repeated in today’s sale of $39BN in 10Y notes (specifically a reopening of 9Year-11Month cusip CLW9). The answer was yes and then some.

Pricing at a high yield of 4.235%, down from last month’s 4.347%, the auction stopped through the When Issued 4.250% by 1.7bps, an improvement to last month’s 0.3bps through and the biggest stop through since June.”

In contrast, this morning ZeroHedge wrote, “According to the latest Treasury data released today, in November – the second month of fiscal 2025 – the US spent a massive $584.2 billion, a 14% increase from the prior year, and a record for the month of November. For those who remember out outrage from a month ago, will also remember that the latest deficit number follows what was also a record government outlay for the month of October.”

Yellen expresses her regrets…

Powell has a problem...

USD continues its rally toward the Cycle Top at 107.62.  The current Master Cycle goes to the year-end, so there is a probability of exceeding that target.  Additional resistance levels may be found near 110.00.  Should it go higher, it may be the terminus for Intermediate Wave (1).

1:30 pm

NDX is completing a new all-time high, while SPX and INDU may have already made theirs last Friday.  One reason for this lengthy rally in NDX is the fact that it has advanced for 4.3 months from the August 5 low as of yesterday.  4.3 is an important integer in calculating time for the markets.  For example, the length of time from the October 27, 2023 low to the July 16 high in the markets took exactly 8.6 months.  In addition, This afternoon is an important (short-term) Cyclical turning point. for the SPX and INDU, as well.

7:45 am     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.

Good Morning!

SPX futures bounced to 6044.00 in the overnight session.  Should it not go higher, it suggests a resistance at 6045.00, which may force a possible decline to yesterday’s low at 6029.89.    Should it go lower, short-term support lies at 6010.48 may hold the decline from further damage.  Round number support at 6000.00 is a “must hold” for options dealers.  If so, a bounce may result, back to 6045.00.  The rationale is that yesterday’s fractal decline may not be complete.  Yet tomorrow’s model suggests a possible snap-back to retest today’s overhead resistance.  Cycles are behavioral, not mechanical.  However, there are guidelines that may influence the market’s behavior.  From those guides, one may construct if/then situations to map the fractals.

9:00 am

The ZeroHedge announcement that re-inflation continues in the CPI may have sparked a reaction in the early morning hours to rally the SPX to 6061.70 thus far.  The 61.8% Fibonacci retracement value is 6066.67.  This may be an attempt to front-run the imminent decline by squeezing the shorts/increasing their own short positions.  The defense of the 6000.00 short gamma level may be off the table, because Wall Street may be going short.  In the meantime, Wall Street has issued some soothing remarks.  

Today’s options chain shows Max Pain at 6060.00.  Long gamma may begin above 6075.00 and strengthened at 6100.00.   Short gamma may lie beneath 6040.00.  It is very strong beneath 6000.00, which may be defended by the dealers…or not.

ZeroHedge reports, “US equity futures are flat ahead of the CPI report that will determine if the Fed cuts rates next week. As of 8:00am, S&P and Nasdaq futures are up 0.1%, with the Mag 7 mostly higher led by NVDA, GOOG and TSLA. Bond yields and the dollar are also higher after a Reuters report that Chinese leaders are considering allowing their currency to weaken as they brace for higher tariffs under a second Donald Trump presidency. In commodities oil is up +1.0%, and gold is trading just shy of $2700. The main macro focus will be CPI at 8.30am ET (see our preview here). We will also have 10y auction at 1pm ET and ADBE earnings after the close.”

VIX futures are holding steady beneath the 50-day Moving Average at 14.61.  The fractal off the Master Cycle low does not appear complete, so we await further developments.  The Cycles Model suggests that trending strength may return by the end of the week.

Bitcoin may be completing a bounce toward 100000.00.  The 61.8% Fibonacci retracement value is at 99657.00.  A reversal to lower levels may occur once the retracement is complete.  In talking with some bitcoin owners, who recognize that the top is in, 100k appears to be a handy exit point on the rebound.

TNX is rising, but may be due for a brief retest of the mid-Cycle support at 42.03.  Today the US Treasury will hold an auction for $30 billion in 10-year notes, which does not elicit a strong reaction in the Cycles Model.  However, the CPI print has instigated the pullback (see below).  tomorrow’s auction of $22 billion of Treasury Bonds may spark a surge in rates.

ZeroHedge reports, “Having accelerated MoM for the past four months, analysts expected today’s CPI print (for November) will rise once again to +0.3% MoM and they were dead on (the biggest MoM rise since April). The 0.3% MoM rise pushed headline CPI up 2.7% YoY – the highest since July…

Source: Bloomberg

Core CPI also rose 0.3% MoM (as expected) which pushed it up 3.3% YoY (not even close to the 2% mandate)…”

USD futures continue their ascent toward the Cycle Top at 107.58.  The current Master Cycle is in day 254, possible giving us the high early next week.  The USD correction may follow, declining down to the mid-Cycle support at 104.01 by year-end.  The BRICS summit in Kazan highlighted the proposed new currency.  However, the new currency has not been implemented yet.

The Japanese Yen may have completed its correction this morning by bouncing at Intermediate support at 65.40.  The Yen is now garnering strength for a potential breakout higher.  New trending strength is emerging through the rest of the week, according to the Cycles Model.

1:23 pm

SPX may be ready for a probe to the 50% retracement value at 6074.42, or possibly higher over the next few market hours.  Most investors do not perceive the change of trend, as small as it is.  However, a lot of damage can be made by a 4-week decline.  It is observed that, “The bull market takes the escalator up, but a bear market takes the elevator down. ”  Speaking of elevators, should SPX slip lower, all bets are off.

9:47 am

BKX has declined beneath its Cycle Top, giving it a confirmed sell signal.  Be aware that there may be a rebound near the 50% retracement level at 136.20.  The Cycles Model suggests the decline may continue through the year-end.

7:30 am    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.

Good Morning!

SPX futures rose to 6060.70 in the overnight session, a 38.2% Fibonacci bounce off the decline.  Should the bounce go higher, it may reach the 50% retracement value at 6074.00 or the 61.8% Fibonacci value at 6080.60.  The Cycle Top lies at 6085.00 and may be the final resistance to the bounce.  The mantra as the market went higher was, “Buy the dip.”  At this time the psychology may be reversed to, “Sell the bounce.”  Equities saw an inflow of 141.08 Billion in the month of November, the largest monthly inflows on record.  The result is that momentum is at its most overbought level since 2007.

Today’s options chain shows Max Pain at 6065.00.  Long gamma may begin at 6075.00 while short gamma lies beneath 6060.00.

ZeroHedge reports, “Futures inch higher, reversing earlier losses even as bond yields gain 3bps to rise to a one week high, and the USD is once again rising. As of 8:00am ET, S&P 500 and Nasdaq 100 inched up 0.1% and 0.2% respectively with Mag7 names mostly higher premarket, even as other large cap tech names are hit post-earnings after software giant Oracle slid as much as 8.8% after quarterly results underwhelmed. Nvidia looked set to extend losses following news that China is probing the AI chipmaker over alleged anti-monopoly violations. US-listed Chinese shares also slipped, ceding gains notched the previous day after Beijing pledged to loosen monetary policy. The commodity complex is weaker as energy items fail to hold yesterday’s gains. Today shapes up to be a quiet macro day ahead of CPI.”

Just as the SPX has a spike high, so the VIX has a spike low, leaving it well beneath the normal markers of a change of trend.   The decline in volatility does not mirror the underlying risks in stocks. That is why the Cycles Model provides the Master Cycles, showing a potential change in trend at the peak or the low.   At this time a short-term  support/resistance at 14.62 may be used to take aggressive positions while most others may wait for the crossing of the 50-day  Moving Average at 17.58.  The less skilled may use a fixed number, such as 25.00 to denote a change in trend, leaving them well behind the curve.

Tomorrow’s options chain shows virtually no short gamma in the VIX.  Long gamma may begin at 17.00 and is moderately populated to 28.00.  However, the December 18 options chain shows Max Pain at 17.50 with short gamma residing from 13.00 to 17.00.  Long gamma may begin at 18.00 and is well populated to 55.00.  The August 5 spike high is coming back into view with options traders.

Bitcoin is challenging its short-term support at 97023.00.  That offers a potential aggressive sell signal, allowing investors to lighten their long positions.  The next support beneath is the Cycle Top at 93563.50.  This strengthens the sell signal and may offer a level from which to short.  The Cycles Model suggests a potentially choppy month of December, with two weeks of decline followed by a possible year-end bounce.

TNX has risen above the mid-Cycle support/resistance at 42.04, creating a buy signal.  The Cycles Model indicates growing trending strength this week and possibly extending through early January.  The Cycle Top at 47.50 is within reach of the next phase higher.  Above that, the enxt possible resistance may be at 53.00.

The Shanghai Composite rose through the Cycle Top at 3435.40, but reversed to close beneath it on day 266 of the current Master Cycle.  The reversal may have begun a new Cycle that may extend to the end of January.  Should the neckline of the Head & Shoulders formation be crossed, during this time, the full decline may be imminent.  .

FEZ, the EuroStoxx 50 ETF rose to the mid-Cycle resistance at 50.67 yesterday, then reversed down to its close at 50.17, beneath the 50-day Moving Average at 50.18.  This action has potentially completed its Master Cycle on day 252 and created a sell signal.  Should that be so, a decline may follow that potentially may extend to the end of January.  Unfortunately, many investors look at the retracement as the beginning of the Christmas Rally.  Sadly, that may not be so.

USD futures have risen to 106.46 this morning as the rebound may take it to the Cycle Top at 107.54.  The Cycles Model suggests the current Cycle may extend to the year-end.  Should the USD rise above the Cycle Top, it may proceed higher in what is called an extended correction.

The Yen is completing its brief correction to the mid-Cycle support at 65.83 before resuming its rally.  This may only provide temporary relief for those utilizing the Yen carry trade for financing.  What may follow has the potential of a very powerful Wave rising through mid-March.  This is not one to be on the wrong side.

The Euro futures have declined to 105.18, still within yesterday’s trading range.  However, the Cycles Model calls for yet another week of decline to new lows, should it decline beneath the Cycle Bottom at 104.96.  Following that, there may be a potential bounce to the year-end.

3:26 pm

Bitcoin has tumbled beneath short-term support at 96720.00.  This offers an aggressive sell signal (lighten your long positions).  Today is day 270 in the old Master Cycle.  The chance of a new ATH is miniscule.  Instead, one should consider the potential for a deep decline.  Contrary to popular belief, bitcoin is not an alternate currency.  It is a trading vehicle and may act as such.

11:05 am

SPX has crossed beneath the daily Cycle Top support currently at 6085.94 and the lower trendline of the small Ending Diagonal formation.  This constitutes an aggressive sell signal.  Take appropriate action.

8:00 am   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.

Good Morning!

SPX made its all-time high at 6099.97 on Friday morning, day 273 of an aging Master Cycle.  It has since traded lower.  This weekend’s SPX futures have traded down to 6077.60 this morning and is currently hovering near that level.  The Cycle Top is at 6078.22 this morning.  A decline beneath that level may induce an aggressive sell signal.  Aggressive sells imply one may lighten the long exposure.  The Cycles Model indicates a potential four weeks of decline directly ahead.  A normal Wave (1) decline may traverse to the Cycle Bottom at 4044.05.  Considering that we are in abnormal times, the decline may go lower.

Today’s options chain shows Max Pain at 6090.00-6095.00.  Long gamma lies directly above 6100.00 while short gamma lies beneath 6085.00.

ZeroHedge reports, “S&P futures are flat after hitting a fresh record highs on Friday and ceding brief gains sparked by China’s monetary-policy shift, as investors focused on an upsurge in geopolitical risk and the outlook for interest-rate cuts in the US and other major economies. As of 8:00am, S&P futures dipped 0.1% and Nasdaq 100 futs were down 0.2% after rising earlier following China’s announcement that authorities will embrace a “moderately loose” strategy next year. More steps on the fiscal side could be unveiled at Wednesday’s Central Economic Work Conference. While Beijing’s pledge boosted Asian markets and supported US-listed Chinese shares in premarket trading, gains elsewhere were short-lived with South Korean stocks plunging as the political crisis deepened. Pre-mkt, Mag7 is mixed while bond yields are flat to up 2bps. the Bloomberg dollar index is flat even as the yen tumbles as hopes that the BOJ will hike in December once again crumble. Commodities are stronger, led by energy and base metals, as moves are being driven by the positive stimulus news from China. As the Fed enters its blackout window, the key macro data points are CPI/PPI, though it would take a tail-risk type of print to move the Fed away from cutting next.”

VIX futures traded up to 13.60 this morning as the Master Cycle low may have been made on Friday, day 260 for the VIX.    Trending strength may be rebuilding as the first surge of trending strength may appear by the end of the week.  VIX shows four weeks of potential rally to the first week of January.  Holiday cheer may turn to gloom as the current administration is scorching the landscape in Washington prior to the new administration.

The December 11 options chain shows Max Pain at 14.00.  Beneath 14.00 is a mixed ag, not clearly favoring the shorts.  Long gamma may begin above 14.50 and is strengthening to 28.00.  The December 18 options chain shows Max Pain at 17.00.  Short gamma is growing between 13.00 and 16.00.  However, long gamma kicks in at 18.00 and runs strong to 60.00.

The Shanghai Composite reached a high today at 3426.65, testing its Cycle Top at 3630.19.  The Chinese politburo may be shifting its stance to moderately loose.  This is the first time since 2008 that it took such a position, sparking a recovery in the earlier attempt.  Will it work again this time?   It is likely that it made its Cycle high on day 265 of its current Master Cycle.  A reversal may be imminent.  This may be the beginning of a worldwide swoon in stocks.

Bitcoin is consolidating beneath its all-time high.  Currently it is testing short-term support at 97130.45.  Should it decline beneath it, an aggressive sell signal may be made,  suggesting one should lighten his/her positions.  A further decline beneath the Cycle Top at 93087.00 gives a clear sell signal.  The next month may be very choppy with larger moves, but no new high anticipated.

3:05 pm

SPX is challenging the lower trendline of the Ending Diagonal and the Cycle Top support at 6078.00 after being repelled at the upper trendline at 6100.00.  You may consider this an aggressive sell signal, especially if it closes beneath 6078.00.  Round numbers (6100.00) may attract speculators, but a failure to overcome resistance at that point is very telling, especially at the end of a long Master Cycle.  Note that sentiment has peaked.   Animal spirits are at all-time highs while the cost of put at all-time lows.  Time to sell!

8:15 am   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.

Good Morning!

SPX futures have been trading flat within a 10-point range overnight in anticipation of the Jobs Report, due at 8:30 am.   Investors are anticipating a “bad” report to justify another rate reduction by the reluctant FOMC.  Today is day 273 of an aging/extended Master Cycle.  SPX is at the apex of the Ending Diagonal.  It has been riding above the Cycle Top is at 6069.12 for the last several days.  A decline beneath that level gives the first indication of a change in trend.  Long positions should be reduced.

Today’s options chain shows Max Pain at 6055.00.  Long gamma may begin above 6080.00 with strength above 6100.00.  Short gamma may begin beneath 6055.00 with strength appearing beneath 6050.00.

ZeroHedge reports, “Futures are flat ahead of what Goldman called “the most important remaining macro report of 2024”, the November jobs report, which will directly determine if the Fed cuts rates in two weeks. S&P futures were down 0.1% at 8:00am ET, flatlining in a quiet overnight session; Nasdaq 100 futures were fractionally in the green even as Mag 7 stocks are a touch lower this morning. China’s CSI/HIS rallied, along with European Luxury/Autos names. Modest gains in the dollar put the greenback on course to rise for the ninth week out of the last 10. Treasury yields ticked higher by 1-3bps across the curve. Commodities are mostly lower for both oil and base metals; oil extended its slide to a third day. Bitcoin pulled back from its record high, after briefly tumbling as much as 7% before erasing most of the losses. Trump tapped prominent venture capitalist David Sacks as his crypto and AI guy and also picked David Perdue (former CEO of DG with excessive business experience in Asia) to be Ambassador to China last night; Today, all eyes on NFP (preview here): the Street’s estimate is for a 220k print, up sharply from 12k jobs in October, temporarily low due to hurricanes and strikes. For the unemployment rate the Street’s estimate is 4.1%.”

VIX futures are also flat, waiting for the Jobs Report to give directionality.  VIX may have made its Master Cycle low on Wednesday, day 258 of its Master Cycle.  The cheap hedging window may be about to disappear as the Cycles Model reveals a possible one-month (panic) rally that may rival the August 5 high.

The December 11 options chain show no short gamma.  Long gamma may begin at 14.50 and strengthened at 17..00, 20.00.

TNX dipped beneath the 50-day Moving Average at 41.79 this morning at the Jobs Report release.  It is possible that the dip may continue to the 50% Fibonacci level at 40.54 before making a reversal.  The Cycles Model calls for the rally in yields to resume through the first week of January.

ZeroHedge reports, “After the October hurricane-driven debacle which sent last month’s payrolls print to the lowest in years, at just 12K, traders were expecting a solid bounce today, with many whispering a print that would come above the consensus estimate of 220K… and they were right: moments ago the BLS reported that in November, payrolls growth surged to 227K, the second highest print since March (after the upward September revision).”

USD futures declined to a new corrective low, bouncing off Intermediate support at 105.42.  The Cycles Model suggests suggests the bounce may continue to the Cycle Top at 107.48 over the next week or so.  Following that, a possible deeper decline awaits the USD through the end of the year.

The Japanese Yen bounced from the 50-day Moving Average at 66.36.  However, the correction may resume shortly with a possible downside target at the mid-Cycle support at 65.84 or Intermediate support at 65.48.  On

2:58 pm

There’s not much room left in this Ending Diagonal.  A breakdown occurs at 6069.00 where one finds the daily Cycle Top support.   Time to lighten the longs.

7:30 am  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.

Good Morning!

SPX futures are hovering beneath yesterday’s new all-time high at 6089.84.  The upper trendline of  the three month Ending Diagonal is near 6100.00.The options are to either throw-over the trendline or break down beneath the Cycle Top support at 6060.00.  Time is running out for the “higher” option, as today is day 271 of the aging Master Cycle.  There is an approximate “window” of two weeks on either side of the 258-day average Master Cycle within which to pivot into a possible new trend.  It has been noted that a significant amount of liquidity has entered the market through short covering.  As the shorts disappear, so does the liquidity.  The SPX is skating on thin ice.  Bull markets die when the last buyer makes his move.

Today’s options chain shows Max Pain at 6070.00.  Long gamma may begin above 6080, strengthening above 6100.00.  Short gamma may begin beneath 6065.00, strengthening beneath 6060.00 (Cycle Top).

Bitcoin has made a new all-time high at 104028.61.  This compares favorably to an earlier estimated target at 102200.00.  While today is day 266 of the current Master Cycle, it is also pegged as a day of strength, which may go in either direction.  Should it go higher, an estimated target may be 110000.00.  Should it reverse, the first support that may indicate a change of trend is currently at 96541.34.

ZeroHedge remarks, “After toying with its fanatical fan base for much of the past 2 weeks, teasing a breach of the “nice round number” resistance several times only to fade right below it, moments ago bitcoin finally erupted higher with an aggressive buyer taking advantage of the illiquid Asian session and sending the world’s first digital token above $100,000 for the first time ever…”

VIX futures have also been flat this morning after making a possible Master Cycle low at 12.89 yesterday, day 258.  The next move may be a slingshot rally above the August 5 high.

The November 10 options chain shows virtually no short gamma.  Long gamma begins at 13.00 and the numbers are growing above it.

TNX has climbed out of its hole, rising above the mid-Cycle support/resistance level at 42.06, creating a buy signal.  The Cycles Model projects a rally in TNX until early January.  The next phase of the rally may take it to 50.00 or higher.  Today’s auction schedule shows $185 billion of 4-week and 8-week bills being put on the block, a large sum.  In addition Yellen is announcing the upcoming auctions of the 3-year and 10-year notes and the 30-year bonds.  Little wonder the Cycles Model calls for a serious increase in trending strength today.  In addition, this morning’s jobless claims remain low as the hurricane effects moderate.  Not a good reason to cut rates, as many seem to hope.