The Long View

It’s times like these, when the markets are near all-time highs, that Wall Street loves to trot out the idea that “You Can’t Time the Market.”  In addition, we have seen that bull markets may run for seriously long periods of time while bear markets are rather short in comparison.  But you won’t see articles or books touting “Buy for the long haul.”  at market bottoms.  Sentiment “goes with the flow.”  That is why it takes so much time and study to master the market.  This chart is not attempting to predict anything.  However, if you believe Mark Twain, “History doesn’t repeat, but it rhymes.”  Then you may understand that everything runs in Cycles.

 

Posted in Published | 13 Comments

February 14, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

3:34 pm

The Agricultural Index is acting like a runaway train, especially after breaking through the downtrend line in January.  I had been suggesting accumulating shares as it has a long way to rally.  However, the current probe higher may be due for a correction back down to the trendline near 375.00.  Could the O.J. futures be an indication?:

ZeroHedge remarks, “Valentine’s Day has arrived, and near-record high cocoa prices mean consumers can expect to pay significantly more this year for a box of chocolates at the supermarket than last year. The price surge has been mainly driven by tightening global supplies, with cocoa inventories in New York and London sliding to new record lows. ”

 

3:06 pm

Gold made its Master Cycle high on Monday, February 11 at 2968.50.  Today it crossed beneath the Cycle Top support at 2900.99, creating an aggressive sell signal.  The Cycles Model suggests that the price of gold may decline through the end of March in the next Cycle iteration.  Take appropriate action.

 

12:30 pm

SPX has made a possible reversal at a Cyclical Pivot Point.  This is a very bearish setup, coming within a point of the January 24 high.

 

7:45 am

 

Good Morning!

SPX futures attempted to make a new all-time high in the overnight session, but fell short at 6127.40.  It is currently testing 6100.00 as it pulls away for its Cycle high.  Note that the Master Cycle has been revised to yesterday’s high at 6116.91 (cash market)as the potential Cycle high.    Note that a reversal becomes evident beneath 6050.00 and the 50-day Moving Average lies at 5998.02.  While the ending fractal looks complete, there is a small possibility of a final probe higher today.  The sideways motion for the past three weeks have let the air out of the AI bubble.  There is no one left to buy the narrative and liquidity is running out as investors are “asll in.”.

Today’s options chain shows Max Pain at 6080.00.  Long gamma may begin above 6100.00 while short gamma resides beneath 6075.00.

Zerohedge reports, “Us equity futures are slightly lower with yields flat and the dollar lower as traders appear exhausted at the end of a rollercoaster week full of headlines on trade tariffs and rumors on Ukraine peace efforts, as well as a slew of earnings and further proof inflation isn’t going away. As of 8:00am ET, S&P futures were down 0.2%, a modest retreat from Thursday’s near-record close; Nasdaq futures were also lower as Palo Alto Networks fell 6.1% in premarket while Airbnb jumped after beating expectations. Mag 7 are mostly flat to slightly lower, with the exception of TSLA’s +1.6% gain pre-market (GOOGL -0.2%, AMZN little changed, AAPL -0.2%, MSFT -0.2%, META -0.3%, NVDA -0.1% and TSLA +1.6%). Luxury stocks were a bright spot in Europe as Hermès rallied to a record after its holiday-season sales surged. Meanwhile, the China rally continues as a broader index of Chinese stocks trading in Hong Kong closed at a three-year high, as the nation’s growing AI capabilities bolster investor optimism over the market’s outlook. Yields are 1-2bp lower while the USD extends its losses on hopes that Trump’s tariff approach poses less of an upside risk to inflation. Commodities are mixed: energy and ags are higher, base metals are lower. The House Budget Committee advanced a budget resolution yesterday, a major first step towards Trump’s legislative agenda. Today, key macro focus will be the latest Retail Sales, which consensus expects to decline 0.2% MoM but the control group to rise by 0.3% MoM.”

 

 

VIX futures are consolidating beneath resistance at 16.29-16.49.  Once above resistance, we may see a steady rise in the VIX through the rest of February.  The Cycles Model suggests a veritable explosion of activity in the first week of March.

The February 19 options chain shows Max pain at 17.50.  Short gamma dominates between 15.00 and 17.00.  Long gamma starts at 20.00 and is gaining conviction up to 60.00.

 

TNX may be finalizing the retracement to the 50-day Moving Average at 45.01 this morning.  While trending strength may come back to TNX early next week, a reversal off the 50-day appears to be anticipated today.  Should it overshoot the 50-day, the trendline at 44.00 may give support for the reversal.  Yesterday’s 30-year bond auction was a disappointment as fewer buyers appeared.  Note that the dealers must buy any treasury securities that are left unsold.  As the size of the Treasury auctions increase, the dealers may be left “holding the bag” on more and more bills, notes and bonds.  This will drain even more liquidity from the equities market.

ZeroHedge reports, “A stellar 3Y auction, followed by a mediocre 10Y, we conclude the refunding week’s coupon offerings with an even more disappointing 30Y sale, which saw $25 billion in ultra long-dated paper sell to muted market response.

The auction stopped at a high yield of 4.748%, down from 4.913% last month, but tailing the 4.736% When Issued by 1.2bps, a reversal to last month’s 0.7bps stop through and the fifth tailing 30Y auction in the past 8 months.”

 

 

USD futures are in decline for the next month, according to the Cycles Model.  This may alter money flow from foreign sources as the currency differential may aggravate losses in equities.

 

As the USD declines, the Yen may rip higher, since it has crossed above mid-Cycle resistance at 65.57.  This is another liquidity chokepoint that may affect equities over the next month.

 

 

 

 

Posted in Published | Comments Off on February 14, 2025

February 13, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

 9:00 am

 

Good Morning!

SPX continues to consolidate between 6033.00 an 6070.00.  Dips are being bought, but sellers wait at the top.  ASfter all this sideways motion, it would appear that the buyers may throw in the towel soon.  Markets top out in exhaustion, where it takes more and more energy to accomplish less and less.  January 31 has become the all-time high for the Industrials at 45045.00.  SPX topped out on January 24.  The NDX has made its peak on December 16 at 22133.00.  The window for a possible new high is closing fast.

Today’s options chain shows Max Pain at 6050.00.  Long gamma may begin above 6065.00.  Short gamma lies beneath 6000.00.

ZeroHedge reports, “Futures are flat, Europe’s Stoxx 600 slipped from session highs and the euro gave up an earlier advance against the dollar sparked by hopes for a Ukraine war ceasefire, after President Donald Trump signaled he’s about to announce reciprocal tariffs on trading partners, just as we warned last night he would. As of 8:00am ET, S&P futures are down 0.1% while Nasdaq futures rise by a similar percentage even as Chinese technology stocks saw a dramatic intraday turnaround to finish lower. TSLA is up 2.2% pre-market with the rest of Mag 7 largely unchanged this morning; CSCO rose 6.8% on the back of a higher revenue forecast. Bond yields are 2-3bp lower, while the USD reversed an earlier loss. Commodities are mostly lower: WTI and aluminum are -1.5% and -0.9% lower, respectively. Today, the macro focus will be PPI and any updates on Trump’s reciprocal tariff plan which the president said in a social media post will be announced on Thursday. Futures contracts on the S&P 500 and Nasdaq 100 erased early gains, while”

 

 

VIX futures are consolidating at the lower end of its trading range (15.64-17.18)  The Cycles Model shows rising strength over the next week.

The February 19 options chain shows Max Pain at 17.50.  Short gamma starts beneath 17.00 while long gamma may begin above 19.00.

 

TNX has pulled back this morning and may test the 50-day Moving Average at 44.97.  The Cycles Model suggests that TNX may resume its rally by early next week.  The target for this probe higher may be the Cycle Top at 48.11.

 

 

 

 

Posted in Published | Comments Off on February 13, 2025

February 12, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

7:45 am

 

Good Morning!

SPX futures consolidated between 6053.00 and 6074.60, a very narrow range.  While retail investors have gone all-out to buy the dips and hedge funds have started to return to the market, they are being met with some large institutional sellers that are selling what retail is buying.  Institutions are reluctant to show their hand when they sell, but the episodes of dip-buying have provided ample cover.  This causes a “truncation” of the rallies where they simply run out of liquidity.  Sentiment is still running high.  However,  the market is approaching the point where retail may run out of cash and leverage, causing the SPX to fall beneath the 50-day Moving Average at 6000.00.

Today is a very busy day, as I am doing a major home renovation.  I may return later to provide additional commentary.

2:00pm

TNX ramped above Intermediate support/;resistance at 45.92 this afternoon after the Treasury Auction results in which the 10-year yield registered at 4.625%.  The Cycles Model implies yields may continue to rise over the next week in anticipation of $175 billion T-bill auction on the 18th.

ZeroHedge reports, “fter yesterday’s stellar 3Y auction, many were expecting today’s sale of benchmark 10Y paper to also be very solid too, especially after the massive post-CPI concession which sent the 10Y surging by over 10bps. It did not quite work out that way, and when the Treasury sold $39BN in 10Y paper at 1:00pm ET, the auction tailed by 0.9bps, the biggest tail since August, in a sale that left a lot to be desired.”

 

2:11 pm

The 10-year auction may have put a damper on the bounce off the SPX 50-day Moving average at 6005.90 today.  Keep an eye on the SPX as a lot of capital has been channeled into the SPX with poor results over the past several weeks.

2:20 pm

 

BKX made an extended Master Cycle high last Friday.  It has since dropped beneath the upper trendline near 137.00, causing a potential aggressive sell signal.  Banks are very sensitive to interest rates, as higher money market rates may “pull” deposits out of passbook savings.

 

 

 

 

 

 

Posted in Published | Comments Off on February 12, 2025

February 11, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

8:00 am

 

Good Morning!

SPX futures are lower, reaching a low of 6041.30.  The all-time high remains at January 24 at 6128.18  We await the decline beneath the 50-day Moving Average at 6000.00 to obtain a sell signal.  Goldman Sachs reports that wage earners making less than $30,0000.00 are falling further behind while middle income consumers are tapping savings and adding debt at an insurmountable pace.  Eggs at the local Aldi’s go for $8.00 per dozen, limit 2.

Today’s options chain shows Max Pain at 6065.00-6070.00.  Long gamma rises above 6100.00 wile short gamma prevails beneath 6030.00.

ZeroHedge reports, “US equity futures, treasuries and the dollar are all lower as the latest tariff news sparked a risk-off move, with traders also looking ahead to testimony from Jerome Powell at 10am ET today. As of 8:00am, S&P futures are down 0.2% while Nasdaq futures drop 0.5%, as Mag 7 stocks all lower with NVDA (-1.2%) and TSLA (-0.6%) underperforming; Europe’s Stoxx 600 index was held back by tumbling mining and travel shares and a gauge of Asian stocks dropped. Trump signed the 25% tariffs on all steel and aluminum imports with no exceptions after market close yesterday. Moreover, the announcement of reciprocal tariffs is expected to arrive in the next few days, which adds further uncertainty on stocks. Gold touched a fresh record high rising as high as $2942 before retracing, while an index of the dollar dropped from Monday, and treasury yields rose. Commodities are mostly higher: oil and aluminum added 1.3% and 1.2%, respectively; Ags are also higher. Today, key macro focus are Powell’s testimony, KO/GILD/SPGI earnings and any updates from Washington.”

 

 

VIX futures have risen to 16.19 this morning, stopping at the 50-day Moving Average at 16.19.  The Cycles Model shows VIX steady-to-rising over the next week.

Tomorrow’s options chain shows Max Pain at 16.00.  There is a small contingent of short gamma at 15.00.  Long gamma begins at 17.00 and strengthens to 29.00.

 

TNX gapped higher to 45.37 this morning.  It is now above the 50-day Moving Average at 44.84 and on a buy signal.  The Cycles Model shows steady gains through the week with acceleration of yields next week.

 

Bitcoin is consolidating beneath the 50-day Moving Average at 98752.50.  Should it break higher in the next week, it may be set up for a decline for the next two months.  The opposite may also be true.

 

Posted in Published | Comments Off on February 11, 2025

February 10, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

8:00 am

 

SPX futures rose to 6056.30 over the weekend in a corrective bounce on day 263 of the Master Cycle.  It is likely that the Cycle Top was put in on Friday, day 260.  I have repositioned the Master Cycle high to Friday, although the high was made on January 24.  The SPX simply went sideways, refusing to go down for the past two weeks, closing above the 50-day Moving Average currently at 5999.63.  Hedge funds are finally back as buyers instead of sellers, having thrown in the towel on their short positions.     No one sees the danger of a sharp and lengthy sell-off at this time.

Today’s options chain shows Max Pain at 6050.00.  Long gamma strengthens at 6100.00 while short gamma prevails beneath 6000.0.

ZeroHedge reports, “US equity futures are higher, led by Tech as investors largely ignored tariff headlines, in this case the 25% tariffs on steel/aluminum which were announced yesterday, and which will predominantly impact both Canada and Mexico. As of 8:00am ET, S&P futures are 0.5% higher, reversing half of Friday’s drop as the tariff news lifted American metals stocks, with US Steel Corp. surging as much as 15% in premarket. Alcoa Corp. rallied 5%. Nasdaq futures are up 0.6%, with Mag7 names all higher ex-TSLA with Semis and Financials catching a bid. Bond yields are mostly unchanged with USD higher. Commodities are seeing strength across the entire complex with gold’s record run continuing, now above $2900. Today’s macro data focus is on the NY Fed’s 1-year inflation expectation given the hotter print on Friday from Univ of Mich; CPI is on Weds.”

 

 

VIX futures are consolidating just above the 50-day Moving Average at 16.16.  A buy signal may be imminent.  The VIX “floor” is rising, giving a subtle clue of increasing strength.

 

 

 

 

 

 

Posted in Published | Comments Off on February 10, 2025

February 7, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

11:33 am

SPX has made its reversal by declining beneath 6050.00, in agreement with the Cycles Model.  While a confirmed sell signal may be made beneath the 50-day Moving Average at 5998.00,  an aggressive sell may be assumed.  It is time to reduce long exposure.

 

7:45 am

 

Good Morning!

SPX futures remain flat this morning, awaiting the January BLS Employment Situation Survey.  Continuing claims appear little changed, while the anticipated benchmark revisions may have some big surprises.  The Cycles Model may allow a new all-time high today, with a reversal to follow.  The January 24 high was a bit early for the Master Cycle.  Should it elect to make a new high today, it would be on day 260.  Retail investors are steamrolling bearish hedge funds and institutions, buying every dip that the market presents in volume not seen before.  Of course, the sell signal lies beneath the 50-day Moving Average at 5997.54.  There may be a big surprise in either/;both directions.

Today’s options chain shows Max Pain at 6050.00.  Long gamma may begin at 6075.00 while short gamma resides beneath 6000.00.

Zerohedge reports, “US equity futures are unchanged, with tech lagging and small caps leading as traders hunker down ahead of a payrolls report that is expected to show 175,000 new workers but will also be dramatically revised. As of 8:00am ET, S&P futures are flat with the index on track for a 0.7% weekly advance; Nasdaq futures are down 0.1%, with Mag 7 mostly lower after AMZN’s earnings disappointment last night (AMZN -2.6%; TSLA -1.5%; NVDA -0.9%); the e-commerce and cloud-computing company gave an outlook that was weaker than expected. Meanwhile, there seems to be no stopping Meta as the social networking giant is on track to extend gains for a record 15th consecutive session. Bond yields are largely flat; USD unchanged. Commodities are mostly higher led by oil (+0.8%). Today, the key macro focus will be NFP (a full scenario analysis from JPM and Goldman can be found here): the Street’s estimate is 175k; a step down from last month’s 256k print. For the unemployment rate the Street expects 4.1%. ”

 

VIX futures are consolidating near the low.  It may have reached its “floor” that may prove to be support for today’s launch.  A jolt of trending strength ma appear today as investors may begin hedging again.

The February 12 options chain shows Max Pain at 17.00.  While there are few puts, calls are showing investor interest up to 30.00.

 

USD futures are consolidating above the 50-day Moving Average at 107.61, creating a possible buy signal.  While today may appear calm, the Cycle Model suggests a triple dose of new trending strength next week.  This buy signal is worth taking seriously.

Investing.com reports, “TOKYO/LONDON (Reuters) -The U.S. dollar edged higher on Friday ahead of key U.S. payroll figures later in the day, after the yen climbed to a nine-week high as market players piled on bets for more interest rate hikes in Japan.”

 

The Japanese Yen has leaped above the 50-day Moving Average at 64.64 and is now above mid-Cycle support at 65.62.  The Cycles Model suggests a rally in the Yen to mid-March.  Note the Yen and the USD are both rising.  This may put an end to the Yen carry trade.

 

8:37 am

TNX extended its Master Cycle low this morning, on day 267.  It has subsequently reversed, challenging the 50-day Moving Average at 44.80  after the release of the January payrolls report.   The Cycles Model suggests TNX may rally through the end of March.  Note the potential Head & Shoulders formation.

 

 

 

 

 

 

 

 

Posted in Published | Comments Off on February 7, 2025

February 6, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

10:20 am

The Agriculture Index has put in an inversion high yesterday.  The path of least resistance is a decline to the 50-day Moving Average at 383.40, or possibly to the trendline near 375.00.  The Cycles Model suggests the next two weeks may be an accumulation phase for Ag commodities.  The breakout above the descending trading channel verifies a potential change in trend.  We will be reading and hearing more about food shortages in the coming year.

ZeroHedge remarks, “Pennsylvania State Police are investigating an egg heist in Greencastle, about 65 miles southwest of Harrisburg, over the weekend. The very thought of such a crime may seem unimaginable, but with wholesale egg prices reaching record highs, the thieves appear to have been paying close attention to recent developments surrounding the worsening nationwide egg shortage.

Local media outlet WHP-TV reported approximately 100,000 organic eggs (worth > $40,000) were stolen from the back of Pete & Gerry’s Organics’ distribution trailer on Saturday night in Greencastle.”

 

8:15 am

 

Good Morning!

SPX futures rose to 6079.80, an 80% retracement of the decline from 6120.91 on January 31.  The Cycles Model suggests the SPX may be at an imminent reversal point today.  Should that be so, SPX may decline beneath its 50-day Moving Average at 5994.34, issuing a sell signal.  Retail buyers have been the driving force in keeping the SPX above the 50-day for the past two weeks.  Retail participation has been greater than at the Dot-Com bubble in 2000.  Yet the all-time high remains at January 24.

Today’s options chain shows Max Pain at 6050.00.  Long gamma may begin above 6080.  Short gamma dominates beneath 6035.00.

ZeroHedge reports, “US equity futures are slightly higher despite heavyweights such as including Ford and Qualcomm slumping in premarket trading after disappointing earnings while tech underperformed on mixed Mag7/Semis pre-mkt price action.  As of 8:15am, S&P 500 futures were little changed after erasing an early gain fueled by Treasury Secretary Scott Bessent’s comment that the Trump administration is focusing on bringing down the Treasury 10-year yield. Contracts on the Nasdaq 100 were unchanged. Bond yields and the USD finally reverse recent losses and rise this morning while commodities are stronger across all of Ags, Energy, and Metals ex-Precious. Scott Bessent said that the Administration is focused on lowering the 10Y yield rather than the Fed Funds rates; the best way to decrease yields is through a lower budget deficit. In other news, HON is splitting into 3 companies. Today’s macro focus is on Jobless data and the BOE decision. The Fed speaker slate include’s Waller (2:30pm) and Logan (5:10pm), and we get earnings from Amazon after the close.”

 

 

 

VIX futures rose to 16.15 overnight, then settled back to the flat line.  The Cycles Model anticipates a burst of trending strength by this weekend.

The February 12 options chain shows Max Pain at 17.00.  However, neither short-nor long gamma show a positive sentiment.

 

TNX has begun to rise out of its Master Cycle low and trendline at 44.00.  What is unrecognized by many is the Head & Shoulders formation at the highs.  Today’s auction shows $185 billion in 4-and 8-week  T-bills will be auctioned.  Bessent is not revealing whether he may curtail the issue of short-term debt VS long-term debt.

Investing.com observes, “President Trump’s comments and executive orders have roiled markets and investor expectations, but from the vantage of the Treasury market, a relative calm prevails. This could change, of course, but for now, key yields for government bonds have been flat to slightly lower in recent days.

The serene profile for Treasury yields is surprising, given the firehose of news updates on topics that, in theory, are relevant to market expectations, inflation, and economic growth. It’s only Wednesday, but Trump so far this week has launched a trade war only to dial it down, offering what may be a temporary reprieve to plans to impose 25% tariffs on Canada and Mexico (a new 10% tariff on China imports still applies).”

 

Bitcoin remains beneath the 50-day Moving Average at 98750.00, on a sell signal.  The next support is the 100-day Moving Average at 94780.44, followed by the 5-month trendline near 90000.00.  Most Bitcoin investors are sanguine about the volatility and may be unprepared for a sudden lurch downward that the Cycles Model anticipates over the weekend.

 

Gold futures declined to 2870.55 this morning, off its master Cycle high made yesterday at 2906.00.  Cycle Top support is at 2866.95, where an aggressive sell signal may be made.  The zig-zag formation identifies this as an Ending Diagonal.  Once the reversal is made, the Ending Diagonal may completely retrace to the low made in October 2022.

ZeroHedge remarks, “On January 30th this was written regarding The Musical Chairs of Gold Supply

Bullion banks relied on a game of musical chairs, borrowing gold to meet short-term needs. But when enough chairs are removed—when buyers refuse to lease their holdings—banks are forced to compete for an ever-dwindling supply. That’s what’s happening now. From: Zerohedge Edit-The LBMA Doesn’t Have the Gold

Yesterday, Bloomberg, in an article entitled Gold at Bank of England Trades at Discount as Tariff Fears Drive U.S. Demand describes the current gold market situation. The article states that:

‘Gold stored in the Bank of England (BOE) vaults is trading at a discount to the broader market as concerns over potential Trump tariffs drive a rush for physical bullion. The surge in demand has created weeks-long withdrawal delays, making BOE gold less attractive than metal stored in commercial vaults.’”

 

Crude oil futures declined to 70.69 this morning as it tumbles beneath the 50-day  Moving Average, reiterating its sell signal.  The Cycles Model suggests about two more weeks of potential decline.  Should it bypass the neckline of the Head & Shoulders formation at 69.00, then the potential target for this decline may be the Cycle Bottom at 64.96.

ZeroHedge remarks, “Oil prices are leaking lower this morning after surging yesterday on Trump’s “maximum pressure” plan for Iran as traders weigh the effect of a US-China trade war on demand.

“Trump tariff chaos and trade war is no good for global growth and oil demand growth,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. “But supply disruptions, as so often before, can then rapidly and suddenly turn everything around.””

 

 

 

 

 

Posted in Published | Comments Off on February 6, 2025

February 5, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

8:15 am

 

Good Morning!

SPX futures declined to 5995.40, remaining above the 50-day Moving Average at 5988.00.  Today may be the final day of reckoning in the Cycles structure.  It is day 258 of the Master Cycle, but the top may have already been made on January 24, leaving equities to flounder in wide-ranging but sideways formation above the 50-day Moving Average.  Today is a Cyclical Pivot day, inferring that equities may now follow the course laid out by the Cycles Model.  That is, a decline to the end of March.  The Pivot (down) may begin at any time this morning.

Today’s options chain shows Max Pain at 6040.00.  Long gamma may begin above 6055.00 while short gamma lie beneath 6000.00.

ZeroHedge reports, “US equity futures slumped, dragged by tech following disappointing earnings from two tech giants (AMD, GOOG) and concerns that an escalation of the Trade War 2.0 will lead to negative revenue impacts for MegaCap Tech (AAPL, Mag7). Further, USPS suspends mail deliveries from China/HK as small parcels that were previously exempt from tariffs are coming under the new Executive Order; impacts about 4mm parcels per day (AMZN; Shein; Temu). As of 8:00am ET, S&P futures were down 0.4%, suggesting Wall Street’s rebound may be short-lived, while Nasdaq 100 futures dropped 0.8% as Google parent Alphabet and AMD plunged in US pre-market trading after disappointing results, and dragged the entire Mag7 lower (GOOGL -7%, AMZN -1%, AAPL -2%, MSFT -0.3%, META -0.4%, NVDA +0.4% and TSLA -1%).  Bond yields slide again, dropping 6bps to 4.46%, and down some 14bps from Tuesday’s highs as rates react to the negative growth impact rather than the expected inflationary impact. The USD is weaker again and commodities mixed as goal soars to a new record high approaching $2900 while energy is sold, and Ags particularly Softs move higher. Today’s macro data focus is on ADP, Mtge Apps, and ISM-Srvcs though the Trade Balance details may pique the Market’s interest. US companies reporting results on Wednesday include Uber, Disney, Ford and Qualcomm.”

 

 

VIX futures rose to 17.75 and is consolidating inside Tuesday’s trading range.  The Cycles Model suggests today may be a day of trending strength, suggesting a possible breakout.  This may be followed by yet another trending strength day on Friday.   The August 5 high at 65.73 makes an interesting target…

Today is options expiration for the VIX.  The longs have gained some momentum, although there is no serious interest in the VIX above 30.00.  Today’s expiration may release some of the hold that the shorts may have on the VIX.

 

TNX extended its decline toward the trendline at 44.00 on day 265 of the Master Cycle.  This move forms an irregular correction, beginning under the trendline and ending above the trendline.  In addition, there is a probable Head & Shoulders formation above the January 13 high telling us that yields have much further to go.

 

Bitcoin slipped beneath its 50-day Moving Average at 98823.51, putting it on a sell signal.  Momentum may be building for a violent, but short-lived decline over the next two weeks.

 

USD futures are challenging the 50-day Moving Average at 107.60.  This may mark the end of the correction as the trend continues higher.

 

Gold futures rallied to a new high at 2901.41 this morning.  This may be the end of the line, as the Master Cycle is on day 261 and round number resistance may take hold.  Stay alert as gold tumbles beneath the Cycle Top support at 2875.00 for an aggressive sell signal.

 

The Agriculture Index has burst above the declining trendline as food inflation takes center stage.  The Cycles Model shows an inversion as it breaks out above the Cycle Top resistance at 404.25.  A decline beneath that level signals a potential correction back toward the trendline near 380.00. The Cycles Model suggests the correction may last perhaps three weeks.  This may allow accumulation of agricultural commodities during that time.

ZeroHedge remarks, “The latest wholesale data from Urner Barry shows egg prices continuing to soar to new record highs amid an ongoing and devastating avian influenza outbreak straining the nation’s egg-producing hen capacity. For ZeroHedge readers, it might be time to consider buying—or even building—a backyard chicken coop ahead of spring, as the nationwide egg shortage is poised to worsen.

Monday’s print of the Urner Barry Egg Index EBP shows prices jumped to $6.44 per dozen, a new record high and more than $1 above from two weeks ago when we informed readers about the “blue-sky breakout” in wholesale prices. ”

 

 

 

 

 

Posted in Published | Comments Off on February 5, 2025

February 4, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

 

7:45 am

 

Good Morning!

NDX futures are consolidating in a range, testing the 50-day Moving Average at 21275.00 at the low and the Intermediate resistance at 21400.26 at the high.  Should it break out above Intermediate resistance, it may challenge the January 31 high at 21846.00.  Tomorrow brings a Cycle Pivot day and a possible high volatility/strength day, which supports that outlook.  The current outlook does not support a new all-time high.

ZeroHedge remarks, “More U.S. CEOs exited their companies in 2024 than in any year in more than two decades, with economic and technological factors contributing to the trend, according to a recent report from global outplacement company Challenger, Gray & Christmas, Inc.”

 

SPX futures are hovering just above the 50-day Moving Average at 5988.00.  The Cycles Model supports the probability that SPX may make a nominal new all-time high.  However, the current Master Cycle may be running out of time.  Wednesday may be a high volatility/reversal day.

Today’s options chain shows Max Pain at a highly-contested 6000.00.  Long gamma may begin above 6030.00 while short gamma dominates beneath 5955.00.

ZeroHedge rpeorts, “US equity futures are flat, recovering from earlier losses after China’s restrained response to US tariffs, and a last-minute reprieve for Canada and Mexico. As of 8:00am ET, S&P futures are flat, having dropped 0.5% earlier after China tariffs went into effect at midnight and China retaliated; Nasdaq futures rose 0.2% thanks to a bid for parts of the Mag7/semis complex (GOOGL +0.7%, AMZN +0.5%, AAPL -0.5%, MSFT flat, META +0.6%, NVDA +0.4% and TSLA +0.5%). Unlike yesterday, USD is weaker to start the session, dropping 0.2% as some traders flagged relief that the worst-case scenarios seem to be avoided. The bond market reaction is muted, with the yield curve bear steepening 1-2bps; the 10Y yield rose 2bps to 4.58%. Commodities are lower with energy getting hit and WTI crude oil futures falling more than 2% to YTD low. Today’s macro focus is on JOLTS and Factory Orders”

 

VIX futures are consolidating inside yesterday’s trading range.  VIX is due for a burst of strength beginning on Wednesday with a possible increase later this week.  Note the subtle but persistent uptick in the lows.  The Current Master Cycle may not be complete until the end of March.

Tomorrow’s options chain shows Max Pain at 17.00.  Short gamma is well populated at 15.00-17.00.  Long gamma begins at 18.00 and shows rising sentiment to 25.00.

 

TNX rose to 45.94 this morning, challenging/crossing Intermediate resistance at 45.87 and leaving the Master Cycle low at 44.62 behind.  The Cycles Model shows steady progress this week, with another burst of volatility over the weekend.  Today an $85 billion 42-day T-bill auction will be held.  Upcoming auctions are to be announced.

 

Bitcoin is hovering above its 50-day Moving Average at 99011.00 this morning.  Should the bounce be over, Bitcoin may resume its decline beneath the 50-day.  The Cycles Model offers two more weeks of possible decline before a substantial retracement may be seen.  A decline beneath the trendline near 91000.00 may open the door for a panic situation.

 

USD futures are pulling back, possibly testing Intermediate support at 108.26 this morning.  USD may continue to consolidate beneath its Cycle Top over the next few days.  However, Trending strength may return next week to push USD to new highs.

 

 

 

 

 

Posted in Published | Comments Off on February 4, 2025

February 3, 2025

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

10:45 am

SPX has bounced above the 50-day Moving Average at 5987.00.  Should it retain its perch above the 50-day , there is a possibility to continue rallying to a new ATH near 6200.00.  Alternatively, a decline back down to the trendline at 5900.00 may limit the rally to near- 6000.00.  Fortunately, the issue may be resolved in just a matter of days.

 

10:13 am

BKX has fallen beneath the trendline at 136.00, crating a sell signal.  The 50-day Moving Average lies at 133.15, signaling further price erosion   There seems to be no direct connection between Trump’s tariffs and the BKX.  However, we cannot ignore that there is something weakening the banking index.

 

8:00 am

Good Morning!

NDX futures fell to 20839.80 this morning, beneath the 50-day Moving Average at 21267.68.  There is a bounce that may alleviate the fear of loss as the markets attempt to regain the 50-day.  However, a further plunge to the 100-day Moving Average at 20697.67 may elicit a panic-selling response.  The 15-month trendline is at mid-Cycle support at 20012.92.  We may continue to see wide-ranging choppiness until Wednesday, the next Cyclical Pivot day.  It is hoped that Trump’s trade war will be short-lived.

Today’s options chain shows max Pain at 21400.00.  Long gamma may begin above 21450.00 while short gamma lies beneath 21290.00.

 

SPX futures tumbled to 5908.40 before a bounce.  It remains beneath the 50-day Moving Average at 5987.02, a cause for concern as it offers a well-recognized sell signal for traders.  Should the decline resume, the 100-day Moving Average and 15-month trendline lie at 5881.06, offering a break in the trend.

Today’s options chain shows Max Pain at 6065.00.  Long gamma may begin above   6075.00 while short gamma lies beneath 6050.00.  Dealers must see SPX rise 100 points above its present position to regain neutral ground.

ZeroHedge reports, “US equity futures tumbled as the market prepares for Trade War 2.0, with both tech and small-caps underperforming as the dollar soared more than 1% pre-mkt, trading near a two year high and the yield curve bear flattens after Trump announced tariffs on Canada, Mexico and China, and warned that European levies are coming. The Canadian dollar fell to its lowest since 2003 and the euro weakened. As of 8:00am ET, S&P futures are down 1.7%, but off session lows having tumbled as much as 2% earlier; Nasdaq futures slide 1.7% with the Mag7 all broadly lower (GOOGL -1.8%, AMZN -2%, AAPL -1.9%, MSFT -1%, META -2%, NVDA -3% and TSLA -3%). Pre-mkt, Mag7/Semis are providing no safety and Cyclicals ex-Energy are under pressure as the market analyzes whether “Trade War 2.0 ushers the end of US Exceptionalism” according to JPM. The 2Y yield is +7bps pre-mkt as the bond market forecasts an inflationary impulse from the tariffs, indicating the market is not selling off on growth but rather on inflationary fears. Trump is said to have calls scheduled with Canadian and Mexican leaders today but warns that tariffs will be implemented on Tuesday if no deal is achieved; sets EU as the next target. Today’s macro data focus will be on ISM-Mfg, Vehicle Sales, and Construction Spending.”

 

VIX futures ramped up to 20.41 in early trading.  It remains beneath last Monday’s peak, but not by a lot.   The Cycles Model shows VIX receiving a triple boost of trending strength this week, sending it to possible new highs.

The October 5 options chain shows a solitary short gamma holding at 15.00.  Long gamma edges out the shorts at 16.00 and runs strong to 30.00.

 

TNX has no appearance of being affected by the Trump tariffs.  It is hovering just above the January 30 low at 44.88.  The Cycles Model shows no particular activity this week, although it may change by the weekend.

 

Bitcoin slipped beneath its double support at 99807.98 on Friday.  This morning it continued its decline, slashing through the 100-day at 63895 and bouncing off the 5-month trendline at 90000.00.  It has since bounced above the 100-day, but remains distant from the super-support at 99813.98.  Should it fail to gain traction, we may see Bitcoin challenge the trendline by the end of the week.

 

USD futures ramped above the Cycle Top at 109.42.  It may find support there, as today is a day of trending strength.   The Cycles Model suggests that USD may continue to rise until mid-March.  Tariffs may be self-defeating, as the currency of the exporting country may lose value, negating the price hike imposed by tariffs.

 

 

 

 

 

 

Posted in Published | Comments Off on February 3, 2025