The Practical Investor

8:00 am   2 Chronicles 7:14 

“If my people, which are called by my name, shall humble themselves, and pray, and seek  face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sins, and will heal their land.” 

Good Morning!

SPX futures made a new all-time high at 6069.00 this morning.  It has traded above the Cycle Top at 6050.51 and may be challenging the 3-month upper trendline at 6100.00.  I have been commenting for several weeks that 6100.00 may be a possible resistance and now it seems likely.  What may be the source of the overnight ramps so prevalent for the lst several weeks?  The best answer is that European investors are moving their money to the US, prolonging the rally (see the chart below).  Time is running out on the current Master Cycle (day 271).  It is possible that the new Cycle may decline to the 1987 trendline by the end of the year.

Today’s options chain shows Max Pain at 6045.00.  Long gamma lives above 6050.00 while short gamma may dwell beneath 6030.00.

ZeroHedge reports, “Futures are higher following yesterday’s geopolitical events in France and S. Korea – which ironically highlight the stable exceptionalism of the US and its markets. As of 8:00am ET, S&P futures are 0.3% higher, and on pace for a 56th record high in 2024, after closing at the 55th yesterday; Nasdaq futures surge 0.6% boosted by positive earnings from CRM (+13.4% pre-mkt) and MRVL (+13.1% pre-mkt). All of Mag7 are also higher pre-mkt with Semis seeing a bid. The yield curve is twisting steeper with 10Y yield +4bps to 4.26%; the USD is reacting positively and is also higher. The commodity complex is under pressure with crude the outperformer while gold dips. Today’s macro data focus is on Mortgage Applications, ADP and ISM-Services. Fed chair Powell speaks at the Dealbook conference at 1:45pm ET. Shortly after 10am ET, France will hold a no confidence vote that is expected to topple the government of PM Michel Barnier and plunge France into an even deeper crisis.”

The EuroStoxx 50 show a miniscule 26% retracement of its 12.5% decline beginning in October.  The political environment is also falling into disarray.  For European investors, there is no alternative but the US.

VIX futures hit a new Master Cycle low this morning at 13.05.  This is a very long tail (Wave (E)), lengthening the Triangle formation which is already one of the longest sideways formations on record.  Today is day 258 of the Master Cycle, matching up precisely with the Model.  While this formation may be interpreted as an indication of calm in the markets, it is just the opposite, since it portends an imminent panic rally.  Think of the next move as a slingshot about to be released.

The December 11 options chain shows no short gamma, while long gamma may begin at 13.00.  This is the ultimate position to begin hedging against a market panic decline.

The Shanghai Composite topped out at 3488.02 may have begun its decline from its Cycle Top resistance at 3415.51 on day 259 of its Master Cycle.  The Cycles Model calls for a two-month decline with a minimum target being the Head & Shoulders neckline and Cycle Bottom at 2700.52.  Given the time allotted to the new Master Cycle, it may decline beneath the neckline, triggering that formation.

In addition, the Nikkei 225 index may have begun a new Master Cycle decline today.

TNX has risen above its mid-Cycle support/resistance at 42.06, creating a buy signal.  This morning it was set back by Intermediate resistance at 42.97, but the Cycles Model calls for strength to return as early as tomorrow, lasting for the next two weeks.  Today and tomorrow the US Treasury will be auctioning off $229 billion in treasury notes.  These auctions will set the tone for the rest of the month, when notes and bonds come into the market.

Bitcoin is breaking beneath its 17-day Moving Average at 95634.09.  While this is a very short-term indicator, bitcoin has failed to make a new high this week.  Should it trade above that level,  there may be another attempt at the high.  The inability to make a new high may be in itself an aggressive sell signal (lighten positions).  A more concrete sell signal may come beneath the Cycle Top support at 89928.06.

USD futures are rising again, with an upper range at the Cycle Top at 107.46.  The Cycles Model shows no strength here, so the likelihood of an early reversal is present.  The ultimate target  is generally the mid-Cycle support at 103.95.

Japanese Yen futures may have completed a brief correction today with a low at 66.13.  The Cycles Model shows imminent strength, beginning tomorrow and lasting up to two weeks.  The Yen carry trade may be challenged mightily should this take place.

7:45 am     2 Chronicles 7:14 

“If my people, which are called by my name, shall humble themselves, and pray, and seek  face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sins, and will heal their land.” 

Good Morning!

SPX futures are hovering above the Cycle Top at 6042.18 this morning.  A  new high was not made overnight.  The upper Diagonal trendline lies near 6065.00 and appears to provide resistance to any move higher.  Today is day 270 in an aging Master Cycle.  The ending fractal is complete.  While the SPX may go nominally higher, the NYSE Hi-Lo Index produced its last high a week ago and shows weakening internals.  The stock market may be a victim of its own success, but investors are running out of attractive alternatives.  This may be a time to consider cash as an investment option.   An aggressive sell signal (lightening the long positions) may be made with a close beneath its Cycle Top at 6042.18.

Today’s options chain shows Max Pain at 6040.00.  Long gamma exists above 6050.00 while short gamma resides beneath 6010.00.

ZeroHedge reports, “US equity futures are flat as the yield curve sees slight steepening; for once, the US is not benefiting from the risk-on rally seen in EU/APAC. As of 8:00am ET, S&P futures are fractionally in the green reversing earlier losses as traders await a busy line-up of Fed speakers and data releases after the index notched its 54th closing high of the year on Monday; Nasdaq 100 futures are down 0.1% even though Mag7 names are mostly higher in the premarket and Semis are bid. The USD is lower as the commodity complex catches a bid; WTI, silver, and sugar the outperformers; earlier Bloomberg reported China moved to restrict exports of rare earth metals to the US used in high-tech/military applications (gallium, germanium, antimony, and other superhard materials). Today’s macro focus will be on JOLTS and Vehicle Sales.”

Bitcoin has completed its corrective bounce and has resumed its decline.  The failed bounce may be visualized as an aggressive sell signal (lighten long positions).  A confirmed sell signal may arise at a decline beneath the Cycle Top, currently at 89356.55.  The sentiment for bitcoin is so strong that the majority of investors may hold or buy the dip, thinking that it may recover.  Keep in mind, however, that the net value per share was only 15480.69 only two years ago.  Cycles tend to revisit the highs (and lows) over an extended period.  Should this trend be complete, the next options may be to revisit the low.

VIX futures are hovering near their low, but have not declined further.  VIX is in its final days of the current Master Cycle.  A reversal may be imminent.

TNX is hovering at its mid-Cycle support at 42.05 after breaking through yesterday.  It has made a buy signal and its time to consider the upcoming targets.  Cycles Model suggests rising yields until early January.  Today the Treasury is offering $75 billion in 42-day notes.  The remainder of the auction schedule will be announced on December 5.  The Cycles Model observes that trending strength may arise on that date, as well.

USD futures are consolidating after yesterday’s strong reversal.  However, there is more to the correction/bounce.  The first target may be the Cycle Top resistance at 107.41.  Keep in mind that the final target may be the mid-Cycle support at 103.93.

Japanese Yen futures have made a new high at 67.04 this morning.  The Cycles Model suggests greater heights for the Yen, as it is entering a period of strength later this week.  Those in the Yen carry trade are finding their positions growing more uncomfortable.  The Question is, “Where does the pain begin?”  This move is making liquidity more expensive than anticipated.

Euro futures are testing the Cycle Bottom resistance at 105.25 this morning.  A failure to regain ascendancy over that support may throw the Euro into another two weeks of decline.  The ultimate target may be 95.00, or lower..

8;15 am     2 Chronicles 7:14 

“If my people, which are called by my name, shall humble themselves, and pray, and seek  face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sins, and will heal their land.” 

SPX closed beneath the Cycle Top support/resistance at 6033.67 on Friday.  It declined to 6019.70 over the weekend, then rose up to challenge the Cycle Top this morning.  This raises the question, “Is the all-time high in on Friday?”  …or will it extend another day or two?  Today is day 269 of an extended Master Cycle.  Investors await the outcome of Black Friday.  

Todays options chain shows Max Pain at 6030.00.  Long gamma hold ascendancy above 6050 while short gamma holds sway beneath 6010.00.

ZeroHedge reports, “Futures are lower to start the new month as the US Dollar pushed higher, partially in response to Trump’s mandate that BRICS drop non-USD FX ambitions but also because the crisis swirling around the French government deepened, dragging on the euro. As of 8:00am ET, S&P futures are down 0.1%, but well off session lows, even as data showed Black Friday sales grew at a faster pace in the US this year; Nasdaq 100 futures are flat. The muted action comes after the S&P recorded its strongest month of the year, rising +5.7%, and is up 8 of the past 9 days. Pre-market, Mag7 are mixed, Semis are weaker, and Software is stronger; Financials are flat. Treasuries fall as traders prepare for US data that may influence the outlook for interest rates. Crude oil is higher, leading Energy to outperform the rest of the commodity complex which is seeing weakness in Ags and Precious. Today’s macro data focus is on ISM-Mfg and Construction Spending but the key this week is Friday’s NFP print to shape Dec Fed rate cut expectations.”

VIX futures consolidated this morning after making a Master Cycle low at 13.49 on Friday, day 273.  This is a very extended Master Cycle and a reversal is expected.

Wednesday’s options chain shows virtually no short gamma.  Long gamma starts at 14.00 and gains some momentum at 17.00.  The largest long holdings are at 25.00.

TNX rose to a morning high at 42.40 after closing beneath the mid-Cycle support/resistance at 42.05.  By rising above the mid-Cycle it has reconfirmed its buy signal.    The Cycles Model suggests the rally may continue through early January with a possible minimum target of 50.75.

ZeroHedge explains, “For some months, I’ve described how the structural issues in the Treasury market – namely that dealers have increasingly shallow warehousing capacity for repo financing – foretell an inevitable return to the cataclysmic funding conditions of March 2020. While there has been some improvement, like the proliferation of sponsored repos that free net balance sheet space, these changes are like steering the Titanic after it’s hit the iceberg. Sweeping changes are what’s needed, and sweeping changes don’t come without cause.”

Bitcoin may have completed its corrective phase of the decline from its all-time high.  If so, we may expect the decline to accelerate, testing/challenging the Cycle Top at 88820.24 where a sell signal may await.    Today’s move lower may be considered an aggressive sell signal,, suggesting a lightening of any long positions.

The Shanghai Composite bounced today, but fell short of the Cycle Top resistance at 3405.62.  It may extend its Master Cycle another day to reach that resistance, with a possible reversal.  The Cycles Model calls for a likely 2-month long decline toward the Cycle Bottom at 2702.08, or lower.

USD futures rose to 106.46 this morning, as it may retest the Cycle Top at 107.38.  USD may remain in a corrective phase through the end of the year.  However, a new high is not out of the question during this time.

The Yen carry trade is becoming painful for borrowers as the yen rose above its 50-day Moving Average at 66.54.  Currently it is testing the 50-day for support.  Should it hold, the yen has the capability of rising to its Cycle Top at 70.44.  Beyond that, it may challenge the neckline of the Head & Shoulders formation at 71.50.  This may spark a liquidity crisis among institutional investors that are using the carry trade for funding.

8:30 am   2 Chronicles 7:14 

“If my people, which are called by my name, shall humble themselves, and pray, and seek  face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sins, and will heal their land.” 

Good Morning!

SPX futures rose to 6021.00 this morning, short of the Cycle Top resistance at 6025.00.  A reversal beneath the Cycle Top (even with a new ATH) may provoke an aggressive sell signal.  Today is day 266 of the aging Master Cycle, with the all-time high made on Tuesday, day 263.  The final fractal (Wave 5) appears to be complete, having similarity to the fractal form of Wave 3.  Today is a half-day with no expectations of a large move in either direction, due to the holidays.

ZeroHedge reports, “US equity futures gained for the second day ahead of a shortened trading session after the Thanksgiving holiday, with Treasuries also rising and the dollar slipping amid mounting (if naive) speculation that president-elect Donald Trump will temper his most extreme trade policies drove the dollar to its biggest weekly loss in three months. As of 8:00am ET, S&P 500 and Nasdaq 100 futures both rose 0.2%, pointing to modest gains in Friday’s post-holiday trading session on Wall Street. The 10-year Treasury yield fell four basis points to 4.22%, the lowest in more than a month, as cash trading resumed after the Thanksgiving holiday. The Bloomberg Dollar Spot Index fell 0.2%, ending an 8 week winning streak and heading for its biggest weekly loss in three months. Oil prices oil prices reverse an earlier loss and trade near session highs with WTI now at $69.20, while gold adds $25 to $2660. Bitcoin rises above $96,000. There is nothing on today’s macro calendar.”

VIX futures tested the Tuesday low at 13.88 by declining to 13.90 this morning.  However, the corrective decline may be complete as the VIX edges higher.  VIX options have been given a clean slate after this week’s options expiration, allowing longs to dominate future options chains.

TNX declined to 42.06, finding support at the mid-Cycle at 42.05.  The correction may be complete, having met its Cyclical target.  A resumption of the rally may continue until early January as financing pressures build in the US Treasury.  The global CPI hs started to rise again…

Bitcoin may have completed its first declining fractal (5 waves down, three up).  Having done so, it is at risk of an imminent, sharp reversal.  A panic decline may develop quickly as the next decline structurally may be larger than the first, at a 9.11% decline.  The Cycle Top at 86995.77 may be the minimum target, with the 50-day Moving Average at 78386.05 possibly being met.

US Dollar futures made a holiday low at 105.58 before staging a possible bounce.  The corrective bounce may rise to the Cycle Top resistance at 107.35 before declining to the mid-Cycle support at 103.90, all within the month of December.  Analysts may look upon this action as the end of the uptrend in the USD.  The Cycles Model suggests the rising trend in the USD is far from over.

10:15 am

Bitcoin may be retracing a completed fractal on day 258, suggesting the high may already be in.  The 50% retracement level is near 95250.00.  The 61.8% retracement is legible at 96366.27.  While Bitcoin may retrace to a higher level, time may be running out.  Time to sell.

8:15 am   2 Chronicles 7:14 

“If my people, which are called by my name, shall humble themselves, and pray, and seek  face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sins, and will heal their land.” 

Good Morning and Happy Thanksgiving!

SPX futures have made a nominal new high at 6027.80, then eased lower.  A new high in the cash market may not necessarily be followed by the same in the futures market.  Today is day 264 of the current Master Cycle (average 258 days).  The Cycles Model suggests a reversal may be followed by a decline to the end of the year.

Today’s options chain shows Max Pain at 6005.00  Long gamma rules above 6020.00 while short gamma may begin beneath 6000.00.

ZeroHedge reports, “Futures are lower as markets digested Trump’s latest cabinet appointments and looked ahead to a barrage of macroeconomic data ahead of the Thanksgiving holiday for clues on the outlook for interest rates. As of 8:00am ET, Nasdaq 100 futures dropped 0.3% while the S&P 500 slipped 0.1% with Mag 7 names mostly lower (NVDA -1.2% and MSFT -0.6%).  Treasuries advanced, pushing the 10-year benchmark yield down by five basis points to 4.26% with a slew of pre-Thanksgiving holiday US data expected, including the Fed’s preferred inflation gauge and an update on economic growth. The dollar fell versus all Group-of-10 peers amid month-end flows while the euro rose to a fresh day high after hawkish comments from ECB Board member Isabel Schnabel. Commodities are mixed with precious metals and oil higher, while base metals are lower. Today, the main macro focus will be PCE release and Durable/Cap Goods Orders.”

VIX futures consolidated above yesterday’s low this morning.  The Cycles Model claims new strength may appear through the rest of the week, despite the holiday.  This is  a good time to accumulate shares to hedge what may come as the current Master Cycle may last up to early February.

Today is options expiration for the VIX, where much of the short gamma comes off the books.  The December 4 options chain shows no appreciable short gamma while long gamma begins at 14.00 and extends to 33.00.

TNX declined lower this morning to 42.46, challenging Intermediate support at 42.79.  The Cycles Model often places the Wave 2 low at the mid-Cycle support at 42.04, which may happen yet this week.  By next week it indicates a possible resumption of the rally in yields until early January.  The bond market sees Trump’s win as inflationary, where nominal yields are compared to those of inflation-linked bonds.

ZeroHedge observes, “After yesterday’s stellar 2Y auction, many expected today’s sale of 5Y paper to be similarly solid especially with yields flattish on the session after yesterday’s massive flattening which pushed the 2s10s back into inversion. And they were not disappointed.

Starting at the top, the auction priced at a high yield of 4.197%, up from 4.138% in October and the highest since Jun. It also stopped through the When Issued 4.199% by 0.2bps. This was the first non-tailing auction since June.”

The Japanese Yen continues to rise, eroding any gains made from the carry trade.  A breakout above the mid-Cycle resistance at 65.87 not only give a possible buy signal for the Yen, but may also be recognized as a threat to a popular source of liquidity.  The new Master Cycle may last until mid-March.

The Euro rose to 105.79, challenging the Cycle Bottom resistance at 105.40.  The resistance at the Cycle Bottom may send the Euro lower, as the Master Cycle has a couple more weeks of decline left.  Not only is the Euro bound toward parity with the US Dollar, but may reach or exceed the low at 95.59 made in September 2022.

USD futures tumbled this morning as it mean reverts to the mid-Cycle support at 103.97.  The new Master Cycle is due to continue the decline to the end of the year.

Gold futures rallied to 2683.21, challenging the 50-day Moving Average at 2675.00.  Intermediate resistance and the trendline lie at 2688.00, which may be the stopper for this bounce.  A reversal here may send gold in a decline to the end of the year.  The minimum target appears to be near 2300.00.  There is a 5-year trendline near 1900.00.

8:00 am     2 Chronicles 7:14 

“If my people, which are called by my name, shall humble themselves, and pray, and seek  face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sins, and will heal their land.” 

Good Morning!

SPX futures declined to 5967.40 during the overnight hours before rising back near 6000.00 this morning.  After multiple attempts on Friday to punch above 5972.00, it succeeded to do so at the open on Monday , making a new ATH.  It also may have completed its Master Cycle on day 262.  The Fractal appears to be complete as an Ending Diagonal.  The Cycle Top resistance is at 6009.70, which gave us an aggressive sell signal (lighten the longs) on Monday.  Investors are euphoric, with an astounding 64% of the options bought are calls.  

Today’s options chain shows Max Pain near 5975.00.  Long gamma may begin above 6000.00, while short gamma may lie beneath 5950.00.

ZeroHedge reports, “n a rollercoaster session of reversals, US equity futures at first slumped only to rise to session highs, while the dollar initially spiked only to slide after Donald Trump vowed to place 10% tariffs on goods from China and 25% on all imports from Mexico and Canada, a move which at first spooked the market but was subsequently viewed as “not as bad as some had expected.” As of 8:00am, S&P 500 futures were higher by 0.2%, while Nasdaq 100 futs rose 0.3% adding to gains in early US session while remaining inside Monday’s range; European and Asian stocks fell, reflecting worries that Trump’s policies will hurt US exporters.  Bond yields are unchanged and the USD – a beneficiary of isolationist policies – gave up early gains only to trade at session lows. The Mexican peso and Canadian dollar weakened. Commodities are higher led by base metals; oil is +0.9% higher. Bitcoin retreated from the $100,000 level after a failed run at the “nice round number” with Standard Chartered suggesting that the catalyst for the pullback yesterday was a post Bessent announcement (for Treasury) reduction in US Treasury term premium.The biggest headlines post Monday close was Trump’s tariff threat on Mexico, Canada and China. Today, the key macro focus will be New Home Sales and FOMC Minutes.”

VIX futures edged lower, to 14.52 this morning after a strong down day yesterday.  Keep in mind this is not a complete retracement.  The VIX is on a pullback from a confirmed buy signal.  “Buy the dip” should be the exigent practice, as the new Master Cycle may last until February.  Investors should be asking the question, “VIX calls?…or SPX puts?”

Tomorrow’s options chain shows Max pain at 17.00.  Short gamma is heavily populated from 14.50 to   16.00, while long gamma begins at 20.00 and has some strength to 30.00.  There is not a lot of (SPX) downside hedging yet.

TNX completed its retracement yesterday at 42.61 and has since reversed higher…in time for trending strength to reappear.  The Cycles Model suggests the uptrend in yields may continue through early January.   Investors, on the other hand,  believe that yields may go down.

ZeroHedge reports, “Treasury yields were already significantly lower this morning (along with crude oil prices) but the strong demand for 2Y Treasuries at this morning’s auction sent them even lower…

Source: Bloomberg

Bidders were evidently happy to scoop up “cheap” paper as the offering stopped at 4.274%, nearly 2 bps through the when-issued yield…”

The Shanghai Composite is hovering at its low after giving a sell signal.  The SSEC has an approximate week to make it to the Cycle Bottom at 2702.85.  Will it make it?  The chart appears borderline panicky.

USD futures reversed from its Master Cycle high on Friday to begin a wide-sweeping correction.  The Cycles Model suggests a possible decline to the mid-Cycle support at 103.85 over the next month.  Inter mediate support at 104.76 provides the first possible bounce platform.  Note that the USD has broken above its previous high made in October 2023 at 107.05.

Euro futures are trading beneath the Cycle Bottom resistance at 105.41 after a strong bounce yesterday.  The Cycles Model suggests a further decline toward parity at 100.00 over the next three weeks with a possible bounce afterwards.

The Japanese Yen spiked higher this morning as it embarks on a new trend.  The Cycles Model suggests the Yen may strengthen to mid-March.  This may give the Yen the opportunity to test (aand possibly trigger) the Head & Shoulders formation at 71.55.

Bitcoin has pulled back from its high at 99772.99 as it may yet complete to 100000.00 (or higher) over the next few days.  Fractal similarity allows BTC to rise to 100900.00 to 102200.00.by the end of the week.  Should it do so, it will have accomplished a much-awaited milestone.  However, the downside from that milestone may be brutal.  The first target for the decline may be the August 5 low at 49202.81.  Unfortunately, the first sell signal lies beneath the Cycle Top at 85103.22.

Gold futures had a key reversal on Monday, first rising to 2723.20, then falling to a low of 2616.60.  Today it stabilized at 2667.25.  The Cycles Model suggests a possible decline to the Cycle bottom at 2125.72 by the end of December.  It may go considerably lower in early 2025.

Crude oil futures tested the neckline of its Head & Shoulders formation at 68.55 this morning.  Once beneath it, it may solidify the sell signal with a very deep target.  Head & Shoulders formations have a reliable track record and often exceed their targets.  The Cycles Model suggests the ensuing decline may continue to the end of the year.

3:32 pm

Bitcoin stalled at 99772.99 today as it attempted the 100000.00 round number target on day 253 of its (average 258 days) Master Cycle.  It may go higher on Monday, but the Cycles Model shows a spike in volatility may come over the weekend.  It may be time to start selling…

3:20 pm

SPX finished its rally at a 72.6% retracement of the decline from the all-time high.  I had warned earlier this week that the last three days of the week would have high volatility that may lead to a new ATH.  This did not happen, although the tension in the markets felt like it.  Today alone, the SPX made three attempts at a new high, all of them ending at 5972.00 from a low at 5944.79.    Many investors are expecting the SPX to continue its rally to Christmas.  In fact, the opposite may be true.  Today the SPX showed its fragility by not going any higher.  This may be the end of the Cycle.

7:30 am     2 Chronicles 7:14 

“If my people, which are called by my name, shall humble themselves, and pray, and seek  face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sins, and will heal their land.” 

Good Morning!

SPX futures dipped to 5920.90 this morning before bouncing.  Yesterday I announced that it had completed a minor fractal on the Cycles turn date (day 258).  The Cycles Model suggests today may be a high volatility day, which may strengthen the reversal.  Of course, there are no guarantees in this profession.  However, there are multiple indicators of an end to new all-time highs.

This morning’s options chain shows Max Pain at 5920.00.  Long gamma may begin above 5950.00, while short gamma resides beneath 5900.00.

ZeroHedge reports, “US futures are lower but well off session lows as investors turn to other regions for better value following this month’s torrid rally in US equities, while bitcoin inched closer toward the landmark $100,000 level, trading less than a thousand dollars away from the vaunted resistance level. As of 8:00am, S&P futures are down 0.1%, and Nasdaq futures drop 0.2%, as NVDA and META fell -1.0% and -0.7%, respectively, while the rest of Mag 7 are mostly unchanged. Bond yields are 2-4bp lower and the Bloomberg Dollar index rose 0.3% to stay on course for an eighth straight week of gains as it hit a 2 year high as the EUR tumbled after another set of dismal PMI prints. In commodities, oil and base metals are lower; precious metals are higher. Today, the key focus will be global PMI releases. Expectations are for the PMI Mfg and Srvcs to print at 48.9 and 55.0, respectively, largely in line with expectations.”

VIX futures are consolidating within yesterday’s trading range.  It made an expanded flat correction, indicating a readiness to proceed higher.  It is on a buy signal with confirmation at the 50-day Moving Average, indicating an accumulation phase may be underway.

The November 27 options chain shows Max Pain at 17.00.  Short gamma is heavily populated between 12.50 and 16.00.  Long gamma may begin at 20.00 and is beginning to populate at 30.00

The Shanghai Composite was repulsed at the Cycle Top resistance at 3385.98 and has begun its descent.  The Cycles Model suggests up to 2 weeks of decline lie ahead.  The Cycle Bottom at 2761.58 may be the target, with a possible undershoot.

Bitcoin is approaching round number (100000.00) attraction on day 253 of the Master Cycle.  Once accomplished, the round number may become resistance as sellers step in.  Another milestone was made yesterday as the assets of bitcoin exchange-traded funds surpassed $100 billion, suggesting high retail involvement.  The Cycles Model gives a possible target between 100900.00 and 102200.00.  However, nothing is guaranteed, as the Model also implies a double dose of volatility over the weekend.

ZeroHedge remarks, “Bitcoin exchange-traded funds now collectively manage approximately $104 billion, and are on track to surpass gold ETFs in net assets.

United States Bitcoin (BTC) exchange-traded funds (ETFs) broke $100 billion in net assets for the first time on Nov. 21, according to data from Bloomberg Intelligence.”

TNX futures declined to 43.83 in the overnight session, approaching a possible structural limit at 43.70.  The correction may be complete today, as bond volatility may rise over the weekend and during the following week.  The rally may be set to resume as the current Cycle may continue its rise to the first week of January.  A near-term potential target may be 5.3%, with possible higher yields on the way.  The Treasury auction schedule shows no long-term bonds being offered this month, piling on the renewals for next year and threatening rising volatility.

Gold futures challenged the diagonal trendline at 2710.00 and promptly reversed on day 259 of its Master Cycle.  Gold commentators call the bounce a “perfect upside panic,” calling for a resumption of the bull market.  However, the Cycles Model now suggests a decline may be underway until the end of the year.  The trendline for this massive rally appears at 1900.00.

Crude oil  futures rallied overnight to 70.75, challenging the 50-day Moving Average at 70.45.  However, it has pulled back from that resistance and may be due to continue its decline through the Head & Shoulders formation and possibly to its stated target by the end of December.

2:20 pm

SPX may have completed its fractal form at 5960.37 this afternoon near the 61.8% Fibonacci retracement value of 5955.00.  A reversal below Intermediate support at 5851.48 moves SPX to a sell signal.  Today is day 258 of the Master Cycle.  Although it made its all-time high on day 248, it may have “bent the knee” at the appropriate time in recognition of the larger pattern.

8:00 am     2 Chronicles 7:14 

“If my people, which are called by my name, shall humble themselves, and pray, and seek  face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sins, and will heal their land.” 

Good Morning!

SPX futures have reached an overnight high at 5938.60 and is lingering near its overnight high.  A rally above 5942.28 closes the gap and a further rally above 5960.00 is an indication of an imminent new spike all-time high.  I had warned that the SPX is in a high strength/high volatility period until the end of the week.  This may give either the strength to approach a new high near 6100.00 or a reversal beneath the 50-day Moving Average at 5785.71.  Speculators are ignoring the threat of nuclear war so amply demonstrated by the firing of (non-nuclear) Russian ICBMs into Ukraine.  

Today’s options chain shows Max Pain at 5915.00.  Long gamma may be found above 5935.00 while short gamma lies beneath 5900.00.

VIX futures backed down to 16.47 this morning.  It may challenge the mid-Cycle support at 16.03.  Yesterday’s challenge of the 50-day Moving Average at 18.16 tells us that this may be a good time to “buy the dip.”

The November 27 options chain shows Max Pain at 17.00.  Short gamma still remains between 12.50 and 16.00.  Long gamma may begin at 20.00, but doesn’t have much conviction above it.

The Shanghai Composite reached a high of 3378.52, just beneath the Cycle Top resistance at 3380.64.  It now has the capability to resume its decline to the Cycle Bottom at 2704.06 in the next two weeks.  There is the possibility of breaking through the neckline of the Head & Shoulders formation, which may trigger a further decline.  A decline of that magnitude may have anegative effect on world-wide liquidity.

The Nikkei 225 Index fell beneath its 50-day Moving Average at 38340.02 today, giving a firm sell signal.  The Cycles Model also gives the Nikkei two weeks of decline.  The Neckline of the Head & Shoulders formation lies just above 31000.00.  The options are either a bounce at the neckline, giving the Nikkei a short reprieve, or a cascade throughthe neckline with dire consequences.

European stock indices have been declining since September 27, as shown in FEZ.  Currently, the EuroStoxx 5o ETF is due for a Master Cycle low this week.  The reason I am showing the overseas stock indices is to show they all are broadcasting varying signs of weakness.  The worst are the European indices.  These charts may be indicating that money is flowing from the overseas indices toward the US indices lately, giving the SPX the ability to make another ATH, despite deteriorating fundamentals..

TNX remains in consolidation, but it may not last.  The Cycles Model indicates a serious jolt of  trending strength coming over the weekend and during the following week.  Most analysts do not consider this rally to be long term and are looking for some relief from rising yields.  However, the impending increase in Treasury borrowing is pressuring yields higher and may affect stock valuations, as well.  Cheap liquidity may go by the wayside as Treasury borrowing crowds out private markets.  The next target for TNX may be 53.00-55.00.

Bitcoin is closing in on its numerical target of 100000.00 on day 252 of the Master Cycle.  There is less than a week left to make its target…and possibly an overshoot.  Prepare yourselves for a reversal that you may not want to participate in.

8:00 am    2 Chronicles 7:14 

“If my people, which are called by my name, shall humble themselves, and pray, and seek  face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sins, and will heal their land.” 

Good Morning!

SPX futures rose to 5934.70 as it attempted to close the gap left last Friday at 5942.78.  It has failed thus far.  The fractal may be complete, but with reservations.  The Cycles Model suggests that the SPX may be beginning a three-day period of high volatility that may either bring about a new all-time high or a panic decline, depending on which direction it breaks.   A look at Wave 3 gives some clues as o the shape of the current fractal.  It may allow a final probe higher (above 6100.00)…or a breakdown beneath the 50-day Moving Average at 5777.13.  Emotions are extremely high, despite threats of war in Europe.

Today’s options chain shows Max Pain at 5905.00 Long gamma may begin at 5910.00 while short gamma lies beneath 5900.00. This is a very tightly wound spring in both directions.

ZeroHedge reports, “US equity futures are higher as traders hoped earnings from Nvidia after the close would unleash fresh buying momentum and wash away the bitter taste from Target’s catastrophic earnings this morning. As of 8:00am S&P futures rose 0.2% as small caps lagged after Wall Street benchmarks recovered from a bout of volatility following the escalation in Russia’s war against Ukraine; Nasdaq futures also rose 0.2% with Mag 7 stock mixed premarket and led by MSFT (+0.6%) and NVDA (+0.5%). Sentiment was also boosted after Putin said he was open to discussing a ceasefire deal with Trump, but is ruling out any territorial concessions (Moscow would freeze the conflict along the present battlelines) and wants a guarantee that Ukraine won’t join NATO. Bloomberg’s dollar gauge rose 0.3%, rebounding from a three-day drop. The 10-year US Treasury yield climbed three basis points after falling yesterday as investors fled to haven assets. On Commodities, oil and base metals are higher while precious metals are lower; Bitcoin is back to all time highs just around $94,000. All eyes on NVDA earnings after market close. Expectations remain higher with crowding positioning (more in our preview later). JPM’s TMT specialist Josh Meyers says that that “a nice beat seems widely anticipated tomorrow, with expectations for the guide starting at $38b and going up a bit from there”, but Goldman’s trading desk is more cautious warning that all the good news may already be in the priced-to-perfection stock.”

VIX futures are hovering above mid-Cycle support at 16.01.  Today’s op-ex has massive positions on either side of 18.00 (Max Pain).  A decline beneath the mid-Cycle support may allow the shorts to cash in.  Once today’s expiration passes, the downside pressure on VIX may be lightened considerably.

The 10-year Treasury futures have resumed an upward climb.  Trending strength may be returning this weekend.   The rally may continue through early January.  This has all the properties of a very powerful Wave to new highs.  The Cycle Top resistance may offer the next test of the strength of this rally.

Bitcoin has resumed its rally to a new all-time high, as mentioned on Monday, when I had estimated the potential target to be 100000.00.  Further information reveals a slightly higher estimated target near 100900.00.  The Cycles Model suggests a possible week may be left in this uptrend.  The reversal may leave a lot of speculators empty-handed, as the decline may be swift and sharp.

The Shanghai Composite Index rose to 3375.25, challenging the Cycle Top at 3374.50.  The Cycle Top resisted, sending the Shanghai lower.  The Cycles Model now suggests the decline may resume in earnest.  It may have the potential to reach the Cycle Bottom at 2702.67 in about 2 weeks.

USD futures declined to 106.07 before reversing course to 106.65 this morning.  It has just a few days left to reach its target at 108.00-109.00 and the end of the current Master Cycle.  There is an outside possibility that this morning’s low (or a deeper low by the end of the week) may have ended the Master Cycle.  We may not be certain until the dust clears from this week.

Crude oil futures hit an overnight high at 69.96, testing the 50-day Moving Average at 70.33.  The Cycles Model suggests it may roll over to resume its decline shortly.  Be warned that this decline may continue until the year-end.  This allows enough time to meet the Head & Shoulders target shown in the chart.

Gold futures rose to 2649.80 this morning as it tests the 50-day Moving Average at trendline at 2666.73.  Once the test is complete (failed), the decline may resume toward the Cycle Bottom at 2101.18.  A reversal at the 50-day may mark the end of the current Master Cycle, as well.

ZeroHedge reports, “Ukraine’s armed forces fired British cruise missiles at military targets inside Russia for the first time, a Western official familiar with the matter said.

As Bloomberg reports, the strikes using Storm Shadow missiles were approved in response to Russia deploying North Korean troops in its war against Ukraine, a move by Moscow that the UK government considered to be an escalation of the conflict, according to the person who spoke on condition of anonymity because of the sensitivity of the matter.”

7:45 am   2 Chronicles 7:14 

“If my people, which are called by my name, shall humble themselves, and pray, and seek  face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sins, and will heal their land.”

Good Morning!

SPX futures declined to 5858.30 this morning.  The likely fractal outcome is that the bounce may resume with an average target of 5925.00.  Should this be so, the bounce may be over by mid-day.  An alternate scenario has the SPX resuming its decline immediately.  The decline that follows may take up to a week with the 3-month trendline and 50-day Moving Average at 5767.35 to be challenged next.  At that time the perceived uptrend may be broken.  The year-long trendline (red) at 5600.00 may be next to be probed in the  following days.  Warren Buffett has raised the cash in his portfolio to at least 27%.  You should be, too.

Today’s options chain shows Max Pain at 5895.00.  Long gamma may tentatively begin at 5900.00 while short gamma lies beneath 5870.00.

ZeroHedge reports, “tocks fell, with European equities shedding almost 1%, and global bonds and the dollar climbing on worries over the latest escalation in the Ukraine. Sentiment was spooked after Vladimir Putin signed a decree lowering Russia’s threshold for a nuclear strike in the event of a massive conventional attack on its soil. The warning came just minutes before Ukrainian forces carried out their first strike within Russian territory with a Western-supplied ATACMS missile, although the tepid Russian response indicated that Putin is in no rush to retaliate to this provocation by the deep state. As of 8:00am S&P 500 futures dipped 0.3%, but were well off their session lows; Nasdaq futures dropped 0.2% with TSLA down 1.5% and NVDA up +0.8% pre-market. The yield on 10-year Treasuries fell three basis points to 4.38% after earlier dropping to 4.33%.”

VIX futures made a nominal new high at 17.86 this morning and remains elevated.  Hedges are being bought.  There is no real fear yet, but caution is on the rise.  VIX is on a buy signal and should be considered for hedging.  The Cycles Model suggests that trending strength may rise during the week with the 50-day Moving Average at 18.22 now being considered a trigger point for a buy signal.  Historically, VIX would not be a mainstream consideration as a hedge  until it reaches 25.00, but it has been so low for such a long period that trigger points are being recalibrated.

Tomorrow’s options chain shows Max Pain at 18.00.  Short gamma rests between 13.00 an 17.00.  Long amma may begin above 20.00.  This week contains the monthly options expiration for the VIX and is heavily loaded.  It may be interesting to see what happens should VIX rise above Max Pain.

The Shanghai Composite has bounced to 3346.76 today in an effort to overcome it Cycle Top resistance at 3369.61.  Tomorrow is a potential day of strength that may propel it to resistance.  However, it may also lead to a very strong reversal.  Should that occur, the Cycles Model implies a decline may follow to the end of January.  A crash in Chinese stocks may set off a chain of events affecting global liquidity.

ZeroHedge comments, “I started as an emerging market analyst in 2002, and one of the biggest best stocks at the time was Petrochina. It was listed in Hong Kong in 2000, and had done nothing for years, before stating to move in 2003, and rising 1,000% by 2007, before entering a prolonged bear market.

In 2003, Warren Buffett bought 7% of Petrochina, and then slowly began exiting in 2007. The final spike happened after Berkshire Hathaway had sold out fully, and the market believed the overhang was gone. Markets were getting very bullish on emerging markets as the Federal Reserve was beginning to cut interest rates as this was seen as the catalyst for emerging markets in 2002.”

TNX has declined to a morning low at 43.57, making a 61.8% retracement of its most recent fractal this morning.  This may allow resumption of the rally in the 10-year yield.  The Cycles Model implies the uptrend in TNX to continue through early January as yields catch up to the reality of burgeoning renewals in 2025 due to Yellen’s propensity to refinance the Treasury market with very short-term issues prior to the election to keep rates down.  Bond volatility has receded, implying a limited trading range, but that may be unrealistic, given the conditions.

USD futures made a low this morning at 106.037 and may have resumed its upward course.  The Master Cycle has yet to complete its fractal at a higher level (108.00-109.00) before completion later this week.  The USD may spend the remainder of the year in decline.