The Practical Investor

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.

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