The Practical Investor

6:45 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!  I have a morning engagement, so I will do an abbreviated session for now.

SPX futures have been trading between 5865.00 and 5889.00 over the weekend.  There doesn’t seem to be much enthusiasm for equities after Friday’s debacle.   Goldman advises that hedge funds may have started aggressively shorting stocks.  Of course, The All-time high was 6017.31, made on November 11.  SPX is on an aggressive sell signal since Thursday afternoon.  An aggressive sell implies one should lighten long exposure.  Just beneath the weekend low is Intermediate support at 5827.52, where a confirmed sell signal may lie.  Further confirmation lies beneath the 3-month trendline and 50-day Moving Average at 5759.85.  The new trend is due to remain in place until early January.

Today’s options chain shows Max Pain at 5890.00.  Long gamma may begin above 5900.00 while short gamma resides beneath 5970.00.

ZeroHedge reports, “S futures are higher even as European and Asian markets fail to stay positive, as traders waited for fresh pointers on growth and the future of interest rates. As of 8:00am ET, S&P 500 futures rose 0.1%, while Nasdaq 100 futures added 0.3% as Tesla shares surged 8% in premarket trading on speculation Trump’s team will ease self-driving car rules; the boost was enough to offset the 2% drop in NVDA ahead of its earnings Wednesday. Bond yields resume their trek higher (10y 4.47%, +3bp this morning) after sliding on Friday, while the USD is trading near session highs erasing an earlier drop. Commodities are mostly higher led by oil (+0.9%), aluminum (+5.3%) and precious metals (gold +1.1%, silver +1.5%). Gold rose more than 1% after Goldman analysts predicted the precious metal would hit a record by the end of next year. Bitcoin recovered from its biggest two-day retreat since the US vote to trade past the $90,000 mark.  This week, the key focus will be earnings (NVDA, WMT, TGT) and global PMIs.”

VIX futures rose to 17.00 over the weekend after giving a buy signal on Friday above mid-Cycle resistance at 15.98.  The new volatility trend may remain in place until early February.  All indications are for rough weather ahead.

The November 20 options chain shows Max Pain at 18.00.  Short gamma resides between 13.00 and 17.00.  Long gamma may begin at 19.00, going strong to 55.00.

I have spent an extensive period building the Bitcoin Cycles Model.  It still may need to be proven over time, but here it is, with its potential promises and shortcomings.  The Model currently shows another two weeks of rally may be left with a potential target near 100K.  Round numbers are very powerful attractants.  This is no exception.  However, there seems to be nothing beyond that, except open air.  The reversal may be swift and violent, as nearly everyone is “all in.”.

The Shanghai Composite is slipping beneath its Cycle Top support at 3385.40, putting it on a sell signal.  The balance of November may be spent in decline, with trending strength rising by mid-week.  While short-term bounces may come into play as the Shanghai declines, the target may be the Cycle Bottom and Head & Shoulders neckline at 2700.00.

The US 10-year Bond yield appears to be consolidating near Friday’s breakout high.  The Cycles Model calls for a steady rise this week, with strength rising toward the end of the week.  The Cycles Model maintains that yields may rise through the end of the year.  Potential targets may include 5.3%, 6.8% and 8.2%.  The Biden administration is doing its utmost to leave scorched earth behind it.

Japanese Yen futures are consolidating after Friday’s reversal from its Master Cycle low.  What follows may be a rally lasting up to 3 months.

 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 morning low at 5905.40 before a mild bounce.  It declined beneath the Cycle Top support at 5964.80 yesterday afternoon, giving an aggressive sell signal.  The next target may be the short-term support at 5874.00, followed by Intermediate support at 5824.34, beneath which the sell signal becomes confirmed.  SPX is deep into short gamma beneath 5950.00.  Should it bounce above that level, a reprieve may be at hand.  Keep in mind that $1.4 trillion SPX options expire at the open while another $375 billion expire at the close.  Investors are overweight on the long side, so yesterday’s announcement by Powell was an unwelcome surprise.

The am options chain shows Max Pain at 5960.00. Long gamma may begin above 5980.00.  Short gamma resides beneath 5950.00.

ZeroHedge reports, “US equity futures drop, and global stocks slide after Fed chair Jerome Powell signaled the Federal Reserve was in no rush to cut interest rates, and unease built over the composition of Donald Trump’s cabinet. As of 8:00am ET, S&P futures were down 0.5%, off session lows; and pointing to a second day of declines; Nasdaq 100 futures were down 0.9% with Mag 7 mostly lower: AAPL, MSFT and META are all 1.0% lower. Drugmakers Moderna, Novavax and BioNTech all slid in New York premarket trading after Trump picked vaccine-skeptic RFK Jr, as his Health secretary. Domino’s Pizza Inc. was among the prominent gainers, after Buffett took a small stake in the restaurant chain. Europe’s Stoxx 600 index slipped 0.3%, on track for its fourth weekly drop, with pharma sector among the biggest laggards, while the MSCI Asia Pacific Index climbed as much as 0.7%, snapping a five-day loss. Bond yields are modestly lower, and the USD retreated, trimming its weekly gain, as some market participants took profit before key data later on Friday and ahead of speeches from Federal Reserve policymakers despite Powell’s clearly hawkish comments. Commodities are mixed, with oil flat, reversing an earlier loss of -1.4%; base metals are lower, while precious metals rise.”

The Shanghai Composite fell to a low of 3330.70 today, beneath the Cycle Top at 3361.05.  This creates a confirmed sell signal.  Supports may be found at 3261.75, 3103.37 and 3029.51 on the way down, causing potential short-term bounces.  The Cycles Model informs us that the decline may last another 3-4 weeks, which allows a possible decline to the Cycle Bottom at 2697.97.  Shold the Shanghai Composite decline beneath that level,  shorts may be banned or trading may be halted.

VIX futures rose to 15.11 this morning, taking short volatility investors by surprise after making a Master Cycle low yesterday at  13.59. on day 258 (bullseye). There may be a buy signal above the mid-Cycle resistance at 15.97.  Sophisticated investors may rely on the 50-day Moving Average at 18.43 for their buy signal.  Sentiment in the VIX is overwhelmingly bearish.  The reversal may inflict maximum pain on these investors.

The November 20 options chain shows Max Pain at 18.00-19.00.  Short gamma resides between 13.50 and 17.00.  Long gamma may begin above 20.00 and extends to 55.00.

TNX may be consolidating after yesterday’s breakout, but trending strength may come roaring back today, confirming the rally may be far from over.  In fact, the Cycles Model suggests the uptrend in yields may last until early January.  5.00% yields may be possible.

ZeroHedge observes, “Prospective homebuyers in Manhattan were sidelined last month as the rate on a 30-year mortgage topped 7%. As a result, rents in the borough rose to three-month highs due to sliding housing affordability.

Bloomberg cited new data from brokerage Douglas Elliman Real Estate and appraiser Miller Samuel that showed the median Manhattan apartment rent climbed 2.4% from a year earlier to $4,295. This was the first annual gain since April.”

Gold futures bounced this morning, leaving yesterday’s low at 2541.50 as a potential Master Cycle terminus on day 251.  If correct, the bounce may continue to test the 9-month trendline and 50-day Moving Average at 2662.46 (an approximate 50% retracement).  Despite all the wailing about how oversold gold is, there are another 7 days to make a possible deeper low.  Those still long may consider lightening their positions at the bounce.  Once the retracement is made, gold may resume its decline to the end of the year.

Crude oil futures declined to 67.51 before bouncing to test the neckline of the Head & Shoulders formation at 68.55.  The formation has been triggered and the Cycles Model affirms a decline may be in place to the end of the year.  The Head & Shoulders target may be realized in that time.

3:33 pm

SPX has declined beneath the daily Cycle Top (not shown) at 5964.60, putting it on an aggressive sell signal.  An aggressive sell at this point suggests lightening the long positions.  There is still a chance of a blow-back to a new high, but it may be diminishing, as fatigue is setting 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 remain trapped between the upper trendline of the 3-month trading channel at 6020.00 and the Cycle Top support (thus far) at 5957.07.  SPX has meandered sideways for the past 3 days since its all-time high and is due for a change in routine by the end of this week.  It is day 251 in the Master Cycle, putting it within a possible week of staging a reversal, if not already.  The upper boundary of the trendline may allow another high near 6020.00-6025.00 (with an outside possibility of reaching 6100.00) while a decline beneath the Cycle top at 5957.00 may offer an aggressive sell signal.  Once the decline has begun, it may last through the end of the year.

Today’s options chain shows Max Pain at 5995.00.  Long gamma may begin at 6000.00 while short gamma resides beneath 5990.00.  A very tight set of parameters.

ZeroHedge reports, “US equity futures have reversed the weakness of the prior two days and are higher, led by small caps as bond yields stabilize after the recent rout sent the 10Y yield to 4.45%. As of 8:00am ET, S&P and Nasdaq futures are up 0.1%, as investors wait to see if upcoming price data and a speech from Jerome Powell will boost expectations for a December interest-rate cut. Mag7 stocks mixed, but Semis have caught a bid after falling 6.3% over the last four sessions: as JPM puts it the pair trade of long Software vs. short Semis is +14.5% over the last 5 sessions. Treasury yields ticked lower, after Wednesday’s CPI data kept alive the hope of a December rate cut; however, Trump trades keep on trucking and the dollar index extended its rally on track for its 7th consecutive weekly gain and the strongest gain since April 2022 while Bitcoin traded at about $91,000, holding close to Wednesday’s record high. Commodities are lower but WTI is flat despite an IEA report of a more than 1 million barrel oversupply in 2025, driven by weaker Chinese demand. Today’s macro focus is on Jobless data and PPI, the latter to seek confirmation of CPI trends from yesterday. There are four Fed speakers today, including Jerome Powell himself.”

VIX futures rose to 14.21 this morning as its reverses out of its Master Cycle low at 13.77 on day 252 of its Master Cycle.  The unmistakable Triangle tail is a very long one, leading to some confusion about VIX continuing its decline to the end of the year.  On the contrary.  The new Master Cycle anticipates higher values through early February.  I double checked the Model and can find no alternative.

The November 20 options chain shows Max Pain at 18.00.  There is massive short gamma between 13.00 and 17.00.  Long gamma is also building massively from 20.00 to 55.00.

TNX futures rose to a morning high at 44.88 before the cash market opened at 44.83.  In either event, TNX made a new Cycle high and shows the likelihood of going much higher.  The Cycles Model shows that strength may increase by the end of the week and the trend may continue until early January.  Not only is there higher inflation in the air, but Yellen has put her thumb on the scale to keep duration and yields of treasuries low in 2024.  That is due to change dramatically over the next two months.

ZeroHedge observes, “After yesterday’s in line – but really cooler than whispered – CPI which restored hope in a December rate cut, all eyes are on this morning’s PPI print to boost dovish hopes that the Fed’s easing cycle would remain on track. It was not meant to be, however, as the PPI came in hotter than expected across the board on both a monthly and annual basis.

Starting at the top, headline PPI rose 0.2% MoM (in line with the +0.2% expected) but September was revised higher from 0.0% to 0.1%; meanwhile on an annual basis, headline PPI rose 2.4%, higher than the 2.3% expected, with the last month also revised higher from 1.8% to 1.9%”

The Shanghai Composite Index declined strongly to 3376.15 today, closing just above its Cycle Top support at 3357.02.  The Cycles Model suggests a surge in trending strength tomorrow, indicating a possible breakdown and sell signal.  The decline may continue through the first week in December.

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.”

NDX futures are consolidating around the Cycle Top support/resistance at 21001.00.  A close beneath that level may bring about an aggressive sell signal.  An aggressive sell suggests investors lighten their long exposure.  Today is day 250 of the current Master Cycle, closing in on the 1 week Cycle turn window.  All eyes will be on the CPI report being released tomorrow.  NDX may be the first to react to an above-expectations October CPI.

Today’s otions chain shows Max Pain at 20950.00.  Long gamma may begin above 20975.00.  Short gamma lies beneath 20900.00.

SPX futures are revisiting yesterday’s daytime low at 5960.08 in a consolidation.   Support lies with the Cycle Top  at 5950.00.  Beneath that is an aggressive sell signal.  Should the SPX break down, the Cycles Model suggests a decline that may last to the end of the year.

Today’s options chain shows Max Pain at 5990.00.  Long gamma may begin above 6000.00 while short gamma emerges beneath 5950.00.

ZeroHedge reports, “US equity futures, and global markets dropped for the second day in a row on Wednesday as rising yields and a stronger dollar dented the euphoric sentiment behind the Trump rally, and as investors awaited key US inflation data amid concerns that Trump’s proposed America-First policies will reignite price growth. As of 8:00am S&P500 futures and Nasdaq 100 futures slipped 0.2% into the CPI print which is expected to rise for the fourth month (full preview here). Pre-mkt, Mag7 is mixed, and semis are lower; Banks, Energy, Industrials, and Healhcare are seeing a bid. Treasuries steadied after a renewed selloff Tuesday while the dollar was flat after earlier rising beyond 155 per dollar for the first time since July, raising the risk that Japan will intervene to slow the depreciation; the EURUSD briefly dropped to 1.0594 the lowest in a year. Commodities are higher led by Energy and Precious Metals. CPI and five Fed speakers are the macro focus for today as the earnings calendar thins out.”

VIX futures were hit hard by the CPI release.  VIX tumbled to a new Master Cycle low this morning, on day 257 of the current Master Cycle.  This may be a red herring, as the core CPI rose for the 53rd straight month and headline CPI rose, as well.

The November 20 options chain shows massive short gamma positions from 13.00 to 17.00.  Max Pain may exist at 18.00.  Long gamma is also building from 19.00 to 55.00.

ZeroHedge observes, “For the 53rd straight month, core consumer prices rose on a MoM basis in October with the YoY pace re-accelerating to +3.33%…”

Source: Bloomberg

10:07 am

BKX may have brought the Cycle Inversion to a close and an early Master Cycle high at 135.50.  With that in mind, the trendline support for the throw-over may be found near 128.00, offering an aggressive sell signal.  Another aggressive sell signal may be found beneath the Cycle Top near 125.00.

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!

SPX futures declined to 5984.60 after several attempts to overcome the 3-month trendline near 6020.00.   Today is day 249 of the current Master Cycle, leaving an approximate week for the reversal.  The rally is beginning to lose strength, so the turn may come sooner than expected.  A decline beneath the Cycle Top at 5942.00 offers an aggressive sell signal.  Confirmation may come beneath Intermediate support at 5803.00.  While a sell signal may not have been given at this time, it may be wise to reduce long exposure, since a reversal may be rather abrupt.  Investors are exuberant, leaving them vulnerable to a quick dose of reality.

Today’s options chain shows Max Pain at 5985.00.  Long gamma may begin at 6000.00 while short gamma may emerge beneath 5970.00.

ZeroHedge reports, “The torrid five-day rally that pushed the S&P 500 to its 51st record close above 6,000 on Monday has finally reversed amid unease over nosebleed equity valuations and the composition of Trump’s incoming cabinet. As of 8:00am, contracts on the S&P 500 and Nasdaq 100 indexes slipped about 0.2% with Mag7 and semiconductors under pressure, while Tesla also dropped in after a post-election surge that lifted its valuation past $1 trillion; healthcare names among the notable gainers. Europe’s Stoxx 600 gauge lost 1% as the rout in Asia continued and the MSCI Asia Pacific Index dropped as much as 1.3%, with chipmakers TSMC and Samsung among the biggest drags. Bond yields are 3-6bps higher as the curve twists flatter; yields are pulling the dollar higher. Commodities are weaker with Energy outperforming. Other Trump trades remained in play, however, with Treasuries falling, the dollar hitting a one-year high and Bitcoin hovering just below $90,000. Today’s macro data focus is on SLOOS, 1-year inflation expectations, and Small Business Optimism, as well as five Fed speakers.”

The Shanghai Composite Index reversed down from the 61.8% Fibonacci retracement level at 3486.98.  The world-wide surge in liquidity may have reached its end, with a potential sell signal for the Shanghai at 3344.00.

ZeroHedge observes, “It was almost one year ago, when we first reported that in the third quarter of 2023, China’s foreign direct investment had turned negative for the first time on record. Fast forward to today, when capital flight from China has become relentless as foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth.”

VIX futures consolidated within yesterday’s trading range, although easing higher.  A buy signal may be made above the mid-Cycle resistance at 15.98.   Should the new Master Cycle be underway, it may last until early December.  It may be possible for the VIX rally to extend into February 2025.  Is that a portent of trouble ahead?

Tomorrow’s options chain shows Max Pain at 15.00, with no short gamma.  Long gamma may begin at 18.00 and extend as far as 50.00.

TNX is rising again, as trending strength returns.  The Cycles Model suggests an ongoing, higher trend through the end of the year.  Since Yellen has issued short term debt to fund the deficits this year, all of it will come due early next year along with any new deficit spending that may need financing.  Potential levels of resistance to the rally are: 53.16, 68.23 and 81.62.

ZeroHedge remarks, “Former Wall Street money manager Ed Dowd is a skillful financial analyst who said in May the economy was skidding.  Now, Dowd predicts the economy is poised to “roll over” and soon. “

Gold futures have made an overnight low at 2595.95 and may be bouncing to test the underside of the 50-day Moving Average and the  8.5-month trendline at 2659.48.  It is on a confirmed sell signal with a possible decline for another 1-2 weeks.  A possible support may be the mid-Cycle support at 2427.44.  The next support may be found at 2300.00.  Gold has been looked upon as an inflationary hedge.  However, it is a better indicator of political instability, especially the prospect of war, which is being dialed back.

ZeroHedge opines, “As economic risks escalate, gold has become a crucial safe-haven asset for investors fearing inflation and even the potential for hyperinflation. ”

Crude oil futures dipped to 67.75 before a mild bounce to test the Head & Shoulders neckline at 68.55.  Crude is on a confirmed sell signal beneath the Head & Shoulders neckline.  The Cycles Model suggests a continued decline through the end of the year.

7:00 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 are nominally higher this morning to 6018.40 thus far.  Today is day 248 in the current Master Cycle.  The SPX is struggling against the 3-month trendline near 6025.00.  Despite the resistance, animal spirits abound.  Should it remain above it, the next resistance is the year-long trendline at 6100.00.  Today is a high volatility day, which may be translated into either strength to go higher or a reversal.  A swift rally such as the one experienced in the SPX last week, may be fragile and may lack staying power.  An aggressive sell signal may be made beneath the Cycle Top support at 5933.00.

Today’s options chain shows Max Pain at 5980.00.  Long gamma becomes strong above 6000.00 while short gamma may prevail beneath 5950.00.

VIX futures rose to 15.35 this morning after Friday’s (Master Cycle) low was made at 14.66.  A rising VIX and rising equities market is an unstable combination and should be carefully monitored.  The Cycles Model suggests that volatility may spike today and again by mid-week, possibly jump-starting the next move higher.

The November 20 options chain shows Max Pain at 18.00-19.00.  Short gamma prevails between 13.00 and 17.00.  Long gamma becomes established at 20.00 and remains strong to 55.00.

TNX futures have risen to 43.57 thus far this morning.  It may be emerging from a shallow correction.  If so, growing strength may propel it to a new high this week.  The Cycles Model suggests rising yields through the end of the year.

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 came down to 5961.90 from yesterday’s all-time high at 5983.84.  The SPX is pulling back from the three-month trendline defining the successive new highs since mid-August.  While the final fractal appears complete, confirmation may be needed.  The Cycles Model tells us that today is day 245 of the  current Master Cycle.  While it may be early, the reversal window is open.  In addition, today may be a high volatility day, followed by a high strength day on Monday.  This suggests either another spike higher or a possible strong reversal.

Today’s options chain shows Max Pain at 5950.00.  Long gamma may begin above 5980.00.  Short gamma is in short supply.

ZeroHedge reports, “The record election rally has finally fizzled and futs are slightly lower after China’s stimulus package revealed this morning disappointed investors. As of 8:00am ET, S&P futures were trading at exactly 6,000, down 0.1% from the first ever closing high above 6,000 but still on track for its best week in a year on the prospect of tax cuts and deregulation under Trump. Nasdaq futures are down 0.3%. Bond yields are 3bp lower after the Federal Reserve delivered a quarter-point interest-rate cut and left the door open for further easing next month; the dollar reversed some of yesterday’s sharp losses when markets fretted they had taken Trump trades too far (they haven’t). Oil is down but base metals are higher. Overnight, Chinese stock futures and the yuan are lower having extended declines after authorities announced a total 10 trillion yuan ($1.4 trillion) program to refinance local government debt, which was disappointing as (1) There was no lift to the Central Govt debt ceiling, and (2) There was no direct support for consumption or the property market, (3) The only announced a debt swap, not incremental stimulus. Today, the macro focus will be on Univ. of Michigan survey, where consensus expects an increase to 71.0 from 70.5 in October, although the rebound in mortgage rates could weight on sentiment. Later tonight, we will receive China PPI and CPI releases at 8.30pm ET.”

The Shanghai Composite probed above the 61.8% retracement value at 3486.96, then slipped beneath that level to 3454.00 today.  This action may have ended the extended Master Cycle.  What follows may be a very sharp decline to the Cycle Bottom at 2697.80 by early December.

VIX futures made a new Master Cycle low at 14.92 this morning on day 269 of the extended Master Cycle.  The Cycles Model suggests today may be a high volatility/reversal day with strength in the new trend developing next week.  The “tail” of the Triangle formation may be complete.

The November 13 options chain shows virtually no short gamma.  Long gamma may begin at 20.00 and currently runs strong to 25.00.

TNX futures pulled back to 42.94 in the overnight session before easing higher.  Should TNX continue to behave in a phase-shift, it may resume its trek higher and in strength over the next several weeks.  The Cycles Model suggests that rates may rise through the end of the year.

Gold futures slipped to 2687.50 this morning after challenging Intermediate support/resistance at 2703.11.  It is on a Cyclical sell signal that becomes confirmed beneath the 50-day Moving Average and trendline at 2655.22.  The next level of support lies at 2600.00.  The 50-day and trendline are a potent combination, signifying a loss of the uptrend since February.  Ending Diagonals tend to make complete retracements.

3:38 pm

SPX has hit the upper trendline of its trading channel near 6000.00.  The top  may be complete.

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 a new all-time high this morning at 5947.20.  It has surpassed the Cycle Top resistance at 5915.00 and appears poised to reach the upper trendline of the 3-month trading channel at 6000.00 as it nears the terminus of its current Master Cycle. Today is day 245 in the Master Cycle, leaving less than 2 weeks to complete the uptrend.   Should the SPX reverse in that time, an aggressive sell signal may be had beneath the Cycle Top at 5915.00.

Today’s options chain shows Max Pain at 5915.00.  Long gamma may begin above 5950.00 while short gamma lies beneath 5885.00.

ZeroHedge  reports, “US equity futures extended their post-election gains, as S&P futures traded near session high with both Tech and small caps outperforming as the dollar eased and yields were flat, as traders continued to map out Trump’s return to the White House and what it holds for the Fed’s interest-rate path. As of 8:00am ET, S&P 500 futs traded 0.2% higher after surging in the previous session on bets that the newly elected President will boost corporates through pro-growth policies; Nasdaq futures rose 0.4% after hitting a new all time high on Wednesday; Mag7 names were mixed premarket with semis bid despite NVDA dipping -21bps. An index of the dollar retreated 0.3% following its best day since Sept 2022. Moves in US Treasury yields were muted after Wednesday’s seismic selloff; bond yields are 1-2bps lower as the curve steepens. The commodity complex is mixed with Ags higher, Energy lower, and Base metals outperforming Precious. Today’s macro data focus is on the Fed’s decision (2pm ET) and the BOE (7am ET); both CBs are expected to cut by 25bps.”

VIX futures are lingering near yesterday’s proposed Master Cycle low at 15.44.  The Fractal may not be complete and the Cycles Model suggests a high volatility presence on Friday.  Thus, the Master Cycle may terminate with a final low and a possible reversal on Friday.

Short VIX positions may disappear today as the November 13 options chain only shows a meager 1047.00 contracts at 16.00 while long gamma may begin at 20.00 and remains strong to 30.00.

TNX futures are consolidating in the overnight session after yesterday’s ramp.  There may be yet another surge above 45.00 before pulling back.  The bond market anticipates another .25 rate cut with a 99.8% certainty.  What may move the markets is the commentary after the announcement.  There is the real possibility of another policy error as the Fed attempts to moderate interest rates in the face of rising inflation.

ZeroHedge observes, “With global markets in chaos in the aftermath of the Trump victory – and what appears to be a Republican sweep – and bond yields soaring by the most since the covid crisis, some were worried that today’s 30Y auction would be a historic disaster and may even fail, as technically improbable as that may be. In the end, with 30Y yields blowing out by more than 20bps, the biggest rout since 2020, such fair proved to be groundless because today’s sale of $25BN in 30Y paper ended up being very solid for the most part.”

Japanese Yen futures may have reached their Master Cycle low yesterday, day 267 of its Master Cycle. This morning’s futures show a rise to 65.195 in early signs of a reversal.  Overhead resistance lies at 66.00, above which a buy signal may be found.  The initial rally may take the  Yen back to its Cycle Top at 70.56 by the end of the month.  A rally above 71.55 may set off the Head & Shoulders formation.  No one is expecting a reversal of that magnitude, yet the Cycle Model trending strength for that period.

USD futures have pulled back to 104.39 this morning, as it may be consolidating or correcting its recent ramp higher.  The current Master Cycle may be complete in the next two weeks.  Normally the contraction would continue for the duration of the Master Cycle.  However, a Fed policy error may cause the USD to surge even higher.

Gold futures have bounced from the 50-day Moving Average and Diagonal trendline at 2652.32 to test Intermediate resistance at 2701.25.  The bounce may not last as it may resume the decline beneath the above-mentioned supports.  The next support beneath that is the mid-Cycle at 2416.76.

Crude oil has declined to 70.69, beneath its 50-day Moving Average at 71.04.  The may create a confirmed sell signal for oil.  Be aware that the Cycles Model indicates a possible decline to the end of the year.  The Head & Shoulders target may be the appropriate target for this move.

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!

US 30 futures rocketed to 43630.50 in the post-election market, making a new all-time high.  This is a highly unusual formation which has multiple outcomes due to its complexity.  The first of two possibilities suggests a final peak being made this morning with a reversal this afternoon.  That leaves a 2-3 week decline into the last week of November.  The second potential outcome implies a continued rally until the last week of November.  In that case, the final top may be as high as 45000.00.  Both scenarios have issues that may be resolved later today.

ZeroHedge remarks, “Trump won in 2016, he also won in 2020 (but it was stolen from him thanks to 20 million “vapor” votes which magically failed to make a re-appearance in 2024), and he just won again in a landslide, not just the electoral but the popular vote as well… and boy are markets rocking!”

SPX futures have risen to 5924.70 in the post-election market.  The same scenario as the Industrials occurs in the SPX.  Either the surge ends today (between 5900.00-6000.00) or the inversion continues until later this month (above 6000.00).  Inversions are unstable, so due care is needed to defend against a sudden outcome.

Today’s options chain shows SPX clearly in long gamma above 5800.00.  Short gamma resides beneath 5700.00.

NDX futures have risen to 20630.90 in the post-election market.  It has not made a new all-time high.  NDX is interest sensitive, so the TNX may have the key to the non-performance in the NDX.  This behavior favors a prompt reversal, bringing down the Blue Chips along with the NDX.

VIX futures plummeted to 15.44 this morning, creating a potential Master Cycle low.  Last week I had introduced the idea, but withdrew it when the VIX challenged the upper trendline of the Triangle formation.  My error was not taking into account the potential move created by the election outcome.  Sometimes formations (especially Triangles) take more patience than most people allow.  The tail to the Triangle appears complete, or nearly so.  Today is day 267 in the current Master Cycle, which doesn’t allow more time for the formation to develop.  The VIX may begin its new (upward) Cycle momentarily.

Today’s options chain shows the puts (under 20) have grabbed the brass ring.

TNX  futures surged to a morning high at 44.89, then eased back.  The Phase Transition is working as explained in prior blogs.  The Cycles Model suggests the trend may continue into January.  This does not bode well for interest sensitive stocks and home mortgages.

The Japanese Yen has fallen to a morning low of 64.74.  It may be making its Master Cycle low today, on day 267.  A reversal in the Yen may begin to put pressure on the Yen carry trade.  This may eliminate a major source of liquidity.

Gold futures tumbled to 2330.75 this morning, testing the 50-day Moving Average and Diagonal Trendline at 2649.82.  It has declined beneath Intermediate support at 2699.54, creating a possible sell signal.  Should it break through the 50-day, the Cycles Model suggests a three-week decline that may challenge the mid-Cycle support at 2413.14.  A potential series of panic down days threaten to bring gold down even further to its Cycle Bottom at 2033.23.

1:30 pm

SPX challenged Intermediate-term resistance (now at 5772.68) and reversed back beneath it, fulfilling both time and price for the retracement.  The market has now become fragile.

ZeroHedge remarks, “In yesterday’s Global Daily we speculated that the rapid tightening in prediction markets for the US presidential race might have been a head fake. Over the course of yesterday, we saw momentum shift in those markets with probability on a Trump win again building. As of this morning President Trump leads by 18pts on PolyMarket, 8pts on Kalshi and 1pt on PredictIt. The PredictIt figure is especially interesting, given that it awarded a lead to Vice President Harris this time yesterday.”

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 an overnight high at 5730.20.  The Cycles Model suggests a possible bounce to Intermediate resistance at  5768.21, as the need for retracement in the market corresponds with the need for calm during the election.  The 50-day Moving Average lies at 5699.43 and is the line in the sand for traders.  Beneath that lies a confirmed sell signal.  Today’s bounce may be the last chance to lighten the longs.

Today’s options chain shows Max Pain at 5750.00.  Long gamma may begin above 5800.00 while short gamma lies beneath 5700.00.

ZeroHedge reports, “Futures are higher led by tech as voting gets underway in a very tight presidential race between Donald Trump and Kamala Harris (full election day guide here). As of 8:00am S&P futures are up 0.1%, off session highs; Nasdaq futures are 0.3% higher with Mag7 names mostly higher as Semis also have a bid. DJT is +6% pre-mkt; BA is +2% after the company secured a labor deal ending an 8 week strike. Palantir surged 13% on record profit and high demand for its artificial intelligence software. The dollar was steady, while 10-year Treasury yields advanced four basis points to 4.32%. The commodity complex is stronger today led by Energy and Base Metals; brent trades aroun $75.50. The macro data focus is on ISM Services and the Election, although we may have to wait for the results: in 2016, Trump was declared winner early Weds but in 2020, Biden was declared winner on Sat.”

The Shanghai Composite Index rose to 3385.92 today.  By its action, one might say, the whole world is watching the US markets.  However, The Cycles Model suggests the retracement bounce may soon be over near 3430.00-3450.00, igniting Chinese speculative fever.   Following the short squeeze, the decline may resume.  The Cycles Model suggests the current Master Cycle may last until early December, where it may land near the Cycle Bottom at 2705.37.  The neckline of a massive Head & Shoulders structure also lies at the Cycle Bottom.  Should the decline exceed that low, the H&S formation may be triggered.

VIX futures are consolidating inside yesterday’s trading range, waiting for some resolution of today’s election.  Implied volatility going into the election is one of the lowest on record.  Usually volatility is high prior to the election and calms down afterwards.  The Cycles Model anticipates the exact opposite of market expectations.  What makes this election different?

Tomorrow’s options chain shows there is no Max Pain.  Short gamma resides from 15.00 to18.00.  Long gamma lies between 23.00 and 25.00.  There is little anticipation of a large move in either direction.

TNX is edging higher, but hasn’t yet broken out.  Once it does, it may go on a rampage higher through the end of the year.  The current activity may be called a “phase shift,” where the trend suddenly ramps into high gear rather than pausing for a consolidation/correction.  This action will certainly change the outlook for bonds and the Fed’s ability to manage or control them.  Since 1949, the Fed has carefully cultivated the image of being “in control” of the bond market.  However, a close examination has shown that the Fed has never anticipated changes, only reacted to them.  The September rate reduction was a major blunder that now has implications that the Fed is no longer in charge.

ZeroHedge observes, “Why so many go so wrong on public debt.

I have been involved in the study of economics for about 30 years. What spurred my interest was the discovery of a major blunder in the field of Public Finance that has caused centuries of misery, poverty and tyranny. The strange thing is that we all know of this blunder in various ways, but inexplicably refuse to incorporate the information into reasoning on this most important subject. It is beyond me why the learned and lettered people of Finance and economics allow this fundamental and dubious premise, passively accepted for millennia, to persist.”

The Japanese Yen is edging higher, toward the mid-Cycle resistance at 66.02.  However, the Master Cycle may not be complete.  The Cycles Model calls for another 2-3 weeks of decline before a major reversal.