The Practical Investor

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.

12:00pm

BKX surged above its trendline and Cycle Top at 171.00, making a top at 172.61.  This move is suspect, since it occurred at the very last day of an extended Master Cycle.  For all intents and purposes, this may be the last day of the rally from the April 7 low.   A sell signal may be offered should BKX decline beneath that double support (171.00).

8:15 am

Good Morning!

SPX futures rose to 6881.60 over the weekend, testing resistance at 6900.00.  The top view is that SPX may resume its decline through the end of January.  A rally above 6900.00 may challenge the outlook.  Geopolitical events over the weekend may have pushed the confidence levels back into positive territory.  However, that is yet to be seen.  A decline beneath support at 6825.00 brings back the bears.

ZeroHedge reports, “Global stocks, US futures, gold, the dollar and bitcoin all rose after the purge of Venezuela’s President Nicolas Maduro fanned geopolitical risk, while renewed momentum in the AI trade powered tech heavyweights in Asian hours.”

VIX futures have risen to a weekend high at 15.27, beneath the trendline near 15.40.  A buy signal awaits above the trendline.  The Cycles Model suggests trending strength may be returning today with subsequent redoubling over the next  several weeks.

Crude oil futures rose to a weekend high at 57.97 at the news of Maduro’s arrest, still beneath Intermediate resistance at 58.23.  Crude has been bouncing on the Head & Shoulders neckline at 56.30.  A further decline beneath it defines its outcome over the next two months.

ZeroHedge comments, “Early Saturday morning, we got news that the US launched air strikes on Venezuelan military sites and captured Nicolas Maduro alive. They then took over control of the massive oil reserves in Venezuela, which makes up a whopping 20% of the world’s reserves, larger than Saudi Arabia or Iran.”

The US 10-year treasury bond yield hit a weekend high at 41.96 before easing back down.  The Cycles Model suggests a rising strength in the yield, precipitating in a possible breakout as early as tomorrow.  This may be more of a game-changer than the price of oil.

US Dollar futures rose to 98.86 this morning, crossing above the mid-Cycle resistance at 98.67, offering a potential buy signal.  However, the Cycles Model  infers that a pullback to 98.18-98.25 may be necessary before forging higher.

Bitcoin rose above the 52-day Moving Average at 89192.00 as (communist) money may be fleeing South and Central America after this weekend event.  Venezuela may be the repository of some 60 billion in bitcoin.  One of bitcoin’s features is that it lends itself to money laundering across borders.  A normal (flat) retracement may go as high at 94600.00.

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.

3:10 pm

BKX made a 67% retracement of its initial decline from its ATH.  It may be ready to begin its decline to the 52-day Moving Average at 155.54 this afternoon.  BKX is on an aggressive sell signal.   There are a lot of mistakes hiding under the rug.  The minimum action may be to sell shares.

8:00 am

Good Morning and Happy New Year!

SPX futures  spent the holiday session bouncing back toward resistance at 6900.00, making it to 6892.00 before easing back down, a 47% retracement of its week-long decline.  There may be yet another challenge of resistance this morning prior to resuming its decline.  A 61.8% Fibonacci retracement may reach 6907.00.  Today’s action may lead into the first panic Cycle of 2026.  A breakdown of the double support at 6800.00 may set off a cascading decline through the month of January.  Wall Street and the MSM have kept bad news at bay to the year-end.  Fourth quarter earnings may only be the tip of the iceberg.

Today’s options chain shows Max Pain at 6875.00.  Long gamma may begin above 6890.00 while short gamma rules beneath 6850.00.

VIX futures eased back from its New Year’s Eve high at 15.17 to to a morning low at 14.76.  Trendline resistance may be at 15.50, above which the buy signal is confirmed.  Many speculators are waiting for a cross above the 52-day Moving Average at 17.56 to trigger their buy signal, while most may wait for at breakout above 18.90, where the trade may become crowded.   The initial surge in strength for 2026 may arrive over the weekend.  The January VIX Cycle is punctuated with weekend surges.

The January 7 options chain shows short gamma from 14.00 to 15.00.  Long gamma resides above 16.00 and stretches to 30.00.

TNX futures surged to 41.96 over the holiday before easing to a low of 41.59 thus far.  TNX may be poised for an imminent breakout, possibly over the next 24 hours.  This will be a game changer, as it will add stress to the financial markets, especially the banks.  A major bank had liquidated its entire deposit with the Federal Reserve in September to “lock in” the yields in treasury bonds.  It may have made the bottom tick in the TNX.  That trade may need to be bailed out in the near future.

Bitcoin probed to its 52-day Moving Average at 89796.00 this morning before pulling away from that resistance.  Today may be a high volatility day, having been repelled from overhead resistance.  A reversal may be sudden and strong, picking up strength by mid-week.  The Cycles Model   infers a probable decline to the first week of February.

Silver futures appear to be resisted beneath the trendline near 75.00 after its weekend rout from the peak at 83.62.  It is on an aggressive sell signal with a very short correction until mid-January.  The Cycles Model anticipates a correction down toward the trendline near 55.00.  It has been found that an unnamed major player was caught short on December 28 in a margin call that liquidated its entire portfolio.  It will probably be blamed on a rogue trader with the institution declaring innocence.  The next phase is likely to be even more dangerous as shortages may develop and governments may attempt to shut down trading in silver.

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.

10:36 am

BKX is coming off its Master Cycle high made on December 24.  Christmas is past and the near-parabolic rally appears over.  The Cycles Model calls for a probable decline to the end of January.  A crossing beneath the upper trendline of the Ending Diagonal formation may have caused an aggressive sell signal, but confirmation lies considerably beneath it, at 157.93.  Nonetheless, lightening of long exposure to banks may be a good move.

7:45 am

Good Morning!

SPX futures consolidated near 6900.00 in the overnight session.  It may be set to decline further to the Intermediate support at 6800.00 over the next couple of days.  The Cycles Model calls for modest declines this week, then potentially accelerating into a panic decline next week.  The new Master Cycle may last to the end of January.  Looking back, it took the SPX two months to put in a new ATH by only 25 points.  Yet Wall Street analysts proclaim a significant acceleration of corporate profits, despite the conundrum of fewer full-time jobs and rising part-time jobs fueling a decline in economic growth.  The January earnings season may tell all.

Today’s options chain shows Max Pain at 6915.00.  Long gamma may preside above 6925.00 while short gamma rules beneath 6900.00.

Zerohedge reports, “Stock struggled to find direction amid a year-end lack of catalysts and the traditional lull in trading in the final trading days of the year. After suffering one of the biggest one-day drops on record, silver and gold regained their footing after sliding from all-time highs.”

VIX futures are consolidating within yesterday’s trading range.  There is a clear reversal above Friday’s Master Cycle low.  The Cycles Model portrays a modest rally into the year-end.  However, thee is a doubly indicted panic event projected for early nest week.  The VIX may awaken from its slumber to welcome 2026.  The collapse of the VIX engenders expectations of economic stability that may not exist in real time.

The December 31 options chin shows Max Pain near 17.00.  Short gamma resides between 14.00 and 17.00 while long gamma becomes strong above 20.00.

TNX tested the 52-day Moving Average yesterday, December 29, completing its Master Cycle at 41.08.  The combination bounce from the 52-day and rally above Intermediate resistance at 41.18 creates a buy signal.  Most may wait for the breakout above 42.00 to buy in.  That may come as early as next week.

USD futures may be consolidating, ready to complete its final probe to the Cycle Bottom at 96.78.  The Cycles Model gives it a week to finish the job.  This weekend appears to offer a possible high volatility resolution to the Cycles.

The Japanese Yen also has about a week to complete the decline into the anticipated Master Cycle low projected to be near 60.00.  This must be an extreme frustration for the Bank of Japan, which has raised its key interest rate from .5% to .75% this month.  Investors much prefer the US treasury bonds over those issued by the Bank of Japan.  It has signaled that there is room for more rate hikes and may do so as early as the first week of Japan, where a Cycle turn is indicated.

Bitcoin may be completing its consolidation move today possibly winding up for an explosive move later this week.  The Cycles Model allows a significant decline into the first week of February as it resumes its mission to take out the Head & Shoulders target.  Bitcoin has been in decline since September as world governments, especially China, have been hostile toward the use of Crypto.  European governments are considering a ban on Crypto, especially as the prospects of a war in Europe arises.

Silver has bounced above its trendline at 72.00 this weekend after a wild ride to its peak at 82.61 on Sunday, then a sell-off to 70.69 in the overnight market.  The Cycles Model calls for a possible consolidation or correction this week with a possible spike higher into the first two weeks of January.  Since silver has some strategic value, a rise to 100.00 per ounce may cause a ban on trading, should the prospects of a war rise.

ZeroHedge remarks, “After an almost vertical move higher, the CME hiked margin requirements on silver futures again, and we got a fast, ugly flush: double-digit intraday drops, headlines about “speculative excess,” and miners getting hit even harder than the metal.(The Economic Times)

That’s the kind of tape that makes late longs puke and tourists swear off commodities for a while. It’s also the kind of tape that tends to create opportunity if the underlying bull case is still intact.”

Gold has crossed beneath its Cycle Top support/resistance at 4425.32 and is now testing resistance from beneath.  Should it remain there, a further sell-off may be develop, with the 52-day Moving Average at 4177.14 in sight.  The Cycles Model project a possible turn next week, suggesting that gold may go lower until then.  Having met its upside target, the likelihood of a major correction is high.

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 declined to 6909.00 this morning thus far, as a reversal from Friday’s Master Cycle high may be in the making.  Should that be so, a decline may begin that lasts through January.  The  Ending Diagonal structure suggests a bottom target may be near the April 7 low at 4835.64.  Initial support lies near 6900.00, then 6800.00, where aggressive positions may be taken.  Intermediate support lies at 6795.00, beneath which a confirmed sell signal may be given.  The 52-day Moving Average lies at 6785.00, offering further confirmation of a sell signal that may be universally recognized by traders.  At a minimum, aggressive sell signals may offer an opportunity to reduce long exposure (sell) while profits remain.

Today’s options chain shows Max Pain at 6925.00.  Long gamma may begin above 6930.00 while short gamma rules beneath 6900.00.  Sentiment is overwhelmingly bullish with call contracts above 6950.00 taking the lion’s share.

ZeroHedge reports, “Stocks are extending their modest losses from their pre-Christmas record as another shortened trading week starts. As late last week, much of the market action is in precious metals, with silver first smashing through $80 for the first time before sliding…”

VIX futures have risen from Wednesday’s miserable low to a morning high at 14.90.  The diagonal trendline near 16.00 offers the first level above which one may find a buy signal.  Further confirmation may lie above the 52-day Moving Average at 18.00.  A breakout above that level may be recognized by the trading community.  The Cycles Model suggests a possible calm but rising VIX for the balance of the week.  VIX may erupt in strength during the week of January 5.

The ;December 31 options chain shows Max Pain at 18.00.  Short gamma rules between 13.50 and 17.00, where the majority of options players are.  Long gamma begins above 19.00 and extends with some conviction to 30.00.

TNX futures made a morning low at 41.01, probing toward the 52-day Moving Average at 40.90 and a potential Master Cycle low.  The low may go unnoticed as the markets may remain relatively calm this week.  However, the week of January 5 offers some excitement as positive trending strength begins in the New Year.

USD futures are hovering above their Cycle Bottom at 96.79 as the current Master Cycle  wraps up this week.  Odds are better-than-even of making a low near that level by the end of the week.  The Cycles Model suggests some potentially explosive moves after the year-end.  Talk of the dollar’s demise may be premature.

Bitcoin rose toward its 52-day Moving Average at 91001.00 this morning, but fell short of its target, declining beneath Intermediate support at 89266.87 and offering a confirmed sell signal.  The Cycles Model suggests a decline into the first week of February where its Head & Shoulders target may be met or exceeded.  Bitcoin offers a view of international liquidity.  As you may see, efforts have been made to maintain liquidity to the year end.  That may be about to end.

Silver futures reached a weekend high at 82.61 before selling off rapidly to a low of 70.23.  The Cycles Model had anticipated this, giving warning as much as two weeks ago of a sudden reversal.  There is no catalyst for this sell-off, or at least a catalyst has not been found as yet.  Dynamic Cycle often run until utter exhaustion as liquidity thins.

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.

2:42 pm

BKX has reversed down from its Master Cycle high made on Wednesday, December 24.  It is hovering very near its upper trendline at 168.00, beneath which an aggressive sell signal may be obtained.  This comes after two FOMC rate cuts in 2025.  What gives?  Normally, a rate cut means more profits for banks by lowering their cost of money.  Normally, banks borrow from each other to meet their liquidity needs.  However, under periods of stress, confidence is lost and banks may apply at the Federal Reserve Discount Window (REPO).

Today troubled banks are being propped up financially through REPO.  The Secured Overnight Finance Rate (SOFR) is at 3.69%.   However, the reserves used to fund REPO have been drawn down as bank deposits have been withdrawn, the economy slows and more banks approach the REPO window.  Normally healthy banks deposit excess cash to the Federal Reserve to fund the REPO.  However, a major institution has withdrawn $158 billion from the Fed reserve account,  causing the funding of the REPO account to become scarce.  That is why the Fed ended QT.  Then it lowered interest rates twice.  Finally, it had to begin QE a month earlier than previously announced to keep the funding available for REPO.  Banks will start reporting earnings the second week of January.  Paraphrasing Warren Buffet, we may find out who has been swimming naked when the tide rolls out.

7:30 am

Good Morning!

SPX futures rose to 6939.70 sometime after the Christmas Eve closing, then eased down near 6930.00, where it remains this morning.  This week’s spike to a new ATH was done on the thinnest volume of the year, on Christmas Eve, when traders had already walked away from their desks, anticipating the Christmas holiday.   A solitary trader working for his employer at the Eccles Building may have been busy making sure that the holiday would not begin on a sour note, pushed the SPX from 6914.00 to 6937.00 in the final hours of trading by purchasing less than 5 million shares on the NYSE.

The Cycles Model indicates that the old Master Cycle was due to end by Monday.  The low volume of trading has allowed the Master Cycle to extend, but not for long.  The pre-holiday spike may make it difficult to spot a reversal, as traders are used to seeing wide-swinging moves lately.  A close beneath 6904.00 may produce a key reversal.  The  support level at 6825.00 provides the clearest level beneath which lies a probable sell signal.

ZeroHedge reports, “US equity futures are little changed in thin trading with most traders away from the screens, while the bulk of overnight actions was once again in gold and silver as precious metals soared to a new record high driven by feverish Chinese demand.”

VIX futures surged to 14.22 this morning, which may be an early indicator of a reversal on the NYSE.  A breakout above the trendline at 15.20 may be the first indicator of a probable buy signal.  A rally above the 52-day Moving Average at 18.11 gives confirmation of the buy signal, which is commonly recognized.

TNX is testing Intermediate support at 41.16 this morning.  While it may go lower, it has fulfilled its retracement requirement and may be ready to resume its uptrend.  A breakout above 42.04 may be commonly recognized as a confirmation of the new uptrend.

ZeroHedge remarks, “After two poor, disappointing coupon auctions earlier this week, when global yields were surging thanks to the circus that is Japan, we have come to the final note auction of the year, and yes… this one was not quite as bad.”

USD futures have bounced from Wednesday’s low.  However, there may be another week for the USD to find a bottom.  A Master Cycle low at the Cycle Bottom at 96.79 appears possible.

Bitcoin is still consolidation between the Cycle Bottom at 85661.00 and Intermediate resistance at 89280.00.  A breakdown beneath the Cycle Bottom support signals the decline toward the Head & Shoulders target.

The Japanese Yen has pulled back from testing its Intermediate resistance on Wednesday at 64.22.It may go as far as the Cycle Bottom at 63.44 before attempting a breakout.  There may be another week of bottom-testing before the surge higher.

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 and Merry Christmas!  My wife and Ihad planned to spend a very quiet Christmas Eve when one of our daughters-in-law mentioned to my wife, “I have always looked forward to celebrating Christmas Eve at your place.”  Another daughter caught wind of it and said, “Count us in!”  It snowballed from there to the other children and grandchildren.  It now appears that we may have as many as 24 people celebrating Christmas Eve at our home.  Thankfully we have the provisions to make it happen.  Ahh, tradition!

SPX futures pushed the envelope in the overnight market, reaching 6911.70 before easing back.  Monthly, weekly, daily and hourly Cycles all proclaim the end is near.  Today’s half-day session is likely to have low volume without the resolution of a reversal.  Abu Dhabi gave it its best shot and still no new ATH.

ZeroHedge remarks, “And there it is: the Santa Rally which we predicted would begin a week ago after Abu Dhabi removed much of the AI capex fears festering the OpenAI ecosystem, the S&P has rocketed to a new record high on Tuesday, with stocks looking set for a quiet start to the abbreviated Christmas Eve session.”

VIX futures tested yesterday’s low at 13.64, but did not go lower.  VIX may have made its Master Cycle low, as all requirements have been met.  However, Wave Bs can be unpredictable.  With VIX at its 52-week low, there is only one way to go.

TNX is lower as part of a corrective process that may take it down to Intermediate support at 41.16 before going higher.  One fly in the ointment is today’s treasury auction.  Yesterday’s 5-year auction nearly sent TNX to test neckline resistance at 42.04, reaching 42.02.  Should today’s auction be lightly attended, we may see yields soar, as $44 billion of 7-year notes are being offered.  Will the buyers be there?

Gold futures hit 4554.90 last night, crushing its long-time target of 4500.00 in an extended Master Cycle.    Cycles may extend to meet long-held targets, as is the case with gold.  However, extended Cycles may give the wrong impression that they can last even longer.  While the crowd is chasing gold, there are other factors at work that may temporarily halt the uptrend.  Gold may give an aggressive sell signal beneath the Cycle Top at 4386.00.

Silver rose to 72.75 in the overnight session, but has now reversed back beneath 71.00.  An aggressive sell signal may be had beneath the trendline at 70.00.

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 futures attempted to make a new high, but failed at 6881.80 thus far.  So close…this is the second attempt at the all-time high that ended marginally lower, instead.  The Santa rally may have failed to thrive.  The Cycles Model infers that stocks have entered their pivot/reversal zone.  The chances of a new ATH have blurred and may be erased shortly.  A decline beneath 6825.00 gives a structural sell signal, but note the options chain.  Further confirmation awaits beneath the Intermediate support at 6791.54.  The 52-day Moving Average lies at 6769.00, beneath which a sell signal is commonly given.

Today’s options chain shows Max Pain at 6870.00.  Long gamma may begin above 6880.00 , with massive calls (over 50,000) above 6900.00.  Short gamma begins massively at 6855.00 with 48,673 put contracts this morning, and more below.  Whichever direction the SPX goes, it may do so vigorously.

ZeroHedge reports, “US equity futures are flat, pointing to a muted open off the overnight session highs on the last full trading session before Christmas, as traders await the last remaining data sets of 2025 to see whether they could materially change expectations for Federal Reserve interest-rate cuts.”

VIX futures have risen to 14.45 thus far.   A buy signal awaits above the trendline at 16.00 while confirmation lies at the 52-day Moving Average at 18.31.  The VIX has been known to move rather explosively out of its Master Cycle lows.  This is something to watch for today.

Tomorrow’s VIX options chain shows short gamma beneath 15.00 while long gamma resides massively above 16.00.

TNX futures are at 42.00 this morning while the cash market shows 41.98.  The Cycles Model shows TNX emerging out of its doldrums in a possible breakout, rising to mid-January.  The five-year treasury note goes to auction today, while the seven-year not is scheduled to be auctioned on December 24.  Should the auctions not go well, hell breaks loose.

ZeroHedge notes, “It’s the last treasury auction week of the year, and due to upcoming holidays, we are running on an accelerated scheduled which means the 2Y auction which usually takes placed on Tuesday, is Monday’s business instead. It was a subpar auction with modest demand; overall grade – not great, not terrible.”

USD futures dipped to a possible early Master Cycle low at 97.85 this morning, with possible confirmation by year-end.  A rise above the mid-Cycle resistance at 98.77 may confirm the reversal.  Otherwise, USD has the option of a further decline to the Cycle bottom at 96.72.

Bitcoin fell beneath its Intermediate resistance at 89073.00 and is testing the Cycle Bottom again, at 86498.00.  It has performed a Master Cycle low at 85085.00 on December 19 and bounced, leaving the possibility of a decline to the first week of February.

Silver rose to a morning high at 70.75 before reversing back down.  This may be its Master Cycle high, as it has breached the upper trendline and may  have reversed beneath it.

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.

8:30 am

Good Morning!

SPX futures rose to 6863.30 thus far this morning, just short of the 6865.00 resistance level mentioned on Friday.  The Cycles Model indicates that the SPX is at an important pivot point, suggesting a possible reversal may be at hand.  The consensus is that the markets are riding a wave of liquidity into the end of the year.  The Cycles Model indicates otherwise.  Massive selling lies ahead to fund the in-the-money calls (T+1) that expired on Friday.

Today’s options chain shows Max Pain at 6835.00.  Long gamma may begin above 6850.00 while short gamma lurks beneath 6800.00.

ZeroHedge reports, “As we previewed late last week, the Santa Rally is back all right, and US equity futures are trading near session highs with the Nasdaq 100 poised to wipe out December’s losses as revived appetite for technology stocks powered gains across equity markets.”

NDX futures rose to 25505.80 thus far this morning, momentum being propelled by fumes from Friday’s positive options expiration.  However, the December 10 high at 25835.00 has not been breached.  Today may be a day of strength for the NDX, but also a day for a reversal.

ZeroHedge observes, “Nvidia shares rose slightly in premarket trading in New York after Reuters reported that the US chipmaker has informed customers it plans to ship its second-most powerful AI chip, the H200, to China before the Lunar New Year in mid-February.”

VIX futures ;declined to 14.81 this morning, extending its Master Cycle low.  The Cycles Model cites today as a potential reversal day as the VIX may find “the floor.”

The December 24 options chain shows short gamma under 15.00 while long gamma prevails above 16.00 and has a presence to 35.00.

TNX has risen to a high at 41.69 this morning, under the critical 42.00 level.  The Cycles Model shows TNX in a sideways consolidation to the end of the year, then rising, with strength, to mid-January.

ZeroHedge notes, “For those traders who are still “out there” instead of the slopes of Chamonix mingling with freshly embezzled US tax dollars by way of Kiev, DB’s Jim Reid reminds that we’re now entering a very quiet spell for markets before Christmas, with data releases and other headline announcements almost completely drying up.”

Bitcoin may be reversing out of a 61.8% Fibonacci retracement of last week’s decline.  The
Cycles Model indicates that Bitcoin is very near its end, if not already on December 19.  It may take another day or two to resolve the pivot point.  With the resolution may come some high  volatility.

Silver futures have risen to 69.51 over the weekend, then eased down from there, testing the upper trendline.  The Master Cycle is stretched about a week beyond its median length of time.  It is time to be very careful with silver.  It may be due for a correction that may potentially decline to the mid-Cycle support at 41.67.  One concern of particular note:  The EU is preparing for war.  As a means of preserving their capital from fleeing, the EU may install capital controls to stymie capital flight.  European countries have been historically noted to abscond with privately held precious metals.  This may affect the price of precious metals in the US.

Gold futures rose to 4474.00 and still climbing in a stretched Master Cycle.  Resistance is at 4500.00.  Gold may be just a day or two from its top, an all-time high.  A correction down to mid-Cycle support at 3601.00 may be imminent.

The Yen is bouncing off support from its November low.  However, it has about two more weeks in the Current Master Cycle.  A deeper low is anticipated by the Cycles Model  The minimum target may be near 63.20, but given time, may decline to 62.30.  The Yen carry trade has been given a reprieve, if only for the next two weeks.  Meanwhile, the Bank of Japan may be worried that the Yen may have lost support, even after raising interest rates to .75% from .5%.  On September 19, 2025 (red line), the Bank of Japan announced the beginning of selling shares in the Japanese stock and real estate market to steady the Yen.  Instead of shoring up the yen, it caused another sell-off.  The current sell-off may destabilize the Japanese markets, thereby increasing the fragility of the US markets.

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.

1:29 pm

SPX continues to rise above its 61.8% Fibonacci retracement level at 6833.47.  The next resistance is at 6865.00.  Dealers are “locked in” to long gamma above 6800.00, causing them to buy higher until the reversal or the close, whichever comes first, when the final options expiration takes place.  A reversal may take place at any time up to the close.  The rally is artificial, being helped along by the dealers who must front-run the in-the-money options to the close of the day when options mature, followed closely by the 0DTE speculators who are riding the options gravy train to the close.  The reversal may come suddenly and without warning.  The markets may open “limit down” on Monday, so this is not a wait-and-see kind of top.

8:00 am

Good Morning!

SPX futures bounced off the 52-day Moving Average a third time overnight, rising to a third lower high at 6799.40 thus far this morning.  The law of physics appears to be working as the bounces lose momentum.  Simply put, liquidity may suddenly be draining from the markets.   This morning’s attempts at keeping the SPX at Max Pain (6785.00) for the morning options expiry may offer another explanation for this phenomenon.  The Cycles Model proposes that the SPX may decline through the 52-day Moving Average at 6764.00 by day’s end.  This may lead to a panic event early next week.

Another concern is investors are still in love with AI and Tech.  Risk exposure remains at high levels while margin levels have grown faster than the market growth.  What could possibly go wrong?

Today’s options expiration is the largest in history at $7.1 trillion.  December options expiration is usually the largest of the year, but this takes it all.  Today’s options chain shows Max Pain (smallest payout) at 6785.00.  Long gamma takes the majority above 6800.00 while short gamma dwells beneath 6770.00.

ZeroHedge reports, “Stocks look set toclose out a choppy week on a steady note, building on Thursday’s gains, spurred by cooler inflation that backs the case for lower borrowing costs. As of 8:00am, S&P 500 futures were 0.1% higher while Nasdaq 100 contracts were up 0.2% after the WSJ reported that OpenAI is set to raise $100BN in fresh capital (from sov wealth funds) removing near-term funding pressures across the AI sector.”

VIX futures dipped beneath the trendline overnight, but has recovered above it.  Just as the 52 day Moving Average offers support for the SPX, the 52-day reveals resistance for the VIX.  We may see a simultaneous breakout later today.   An alternate view is that we may sse the VIX pushed down to a new low prior to breaking out next week.

TNX futures rose from its Master Cycle low at 41.39 overnight to a morning high at 41.61.  Should this be correct, the new Master Cycle may rally through mid-January.  Overhead resistance at the neckline, once broken may result in TNX rising to the mid-40s, with the Cycle Top at 45.45 as an outlier.  The Fed’s clear bias toward easing has gone unopposed for 30 years until recently.  There have been a rising number of dissents with a bias for tightening.  December was the highest.  This may lead to higher volatility, especially with a possible new Chairman who is beholden to the White House.  The Cycles Model clearly shows rising rates going into 2026.

USD futures rose to 98.75 this morning, approaching the mid-Cycle resistance at 98.83.  A breakout may trigger a buy signal with confirmation above the 52-day Moving Average at 99.21.  The Cycles Model shows a burst of energy emanating from the USD over the weekend followed by a rising trend into the first week of January.

The Japanese Yen futures declined to 63.53, forming a bounce off the Cycle bottom.  This is not what the Bank of Japan has envisioned.  However, the decline and bounce may provide the energy to rally/break out above trendline resistance at 64.77.  Trending strength may return early next week as the Yen may have sufficient energy to rally through the New Year.

ZeroHedge remarks, “In the last central bank decision of 2025, the BOJ lifted its key rate to 0.75% from 0.50% in a widely anticipated and telegraphed move, taking borrowing costs to their highest level in three decades. It wasn’t enough, however, and after an initial kneejerk move, the yen plunged while yields soared as the market concluded that what Ueda did was too little, too late, and the hike was too vague to press the hawkish case.”

Bitcoin rallied from a low at 84562.00 to a morning high at 89451.00 before reversing back down.  It may embark on its final plunge with a double dose of trending strength into the next week.  The decline may be spectacular for those on the sidelines.  Not so much for those participants who are still long.

Silver is testing te Wednesday high, reaching 66.76 thus far.  This may be the final probe at the high, as the Master Cycle may have ended on Wednesday.  The new Master Cycle may decline into the first week of January.

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.

12:14 pm

SPX was repelled at the 50% retracement level at 6813.76 this morning, then restarted its decline.  This may have occurred at the behest of the dealers trying to nudge the SPX into long gamma territory above 6800.00.  SPX has since declined to  the 52-day Moving Average at 6764.17. A drop beneath it may result in the SPX going into a much steeper decline.

8:00 am

Good Morning!

SPX futures bounced this morning to retest the 52-day Moving Average at 6763.75, rising to 6756.60 thus far, before resuming its decline.  The stage is set for a potentially powerful decline toward the 1987 trendline near 6000.00 in the next week.  There is likely to be a Christmas bounce, but the Santa Rally is past.  The real panic may begin beneath the neckline at 6521.92.

Today’s options chain shows Max Pain at 6765.00.  Long gamma rests above 6800.00 while short gamma resides beneath 6750.00.  Options are off to a bearish start.

ZeroHedge records a tap on the brakes, “Stocks rebounded from Wednesday’s tech-led rout after an upbeat forecast from Micron helped put the brakes on a tech-driven selloff on a busy day for data and central bank meetings.”

VIX futures slid to 16.93, remaining above the trendline near 16.30.  It remains poised to break out above the 52-day Moving Average at 18.38.  The next resistance is the Cycle Top at 30.93.  Once above that the nest resistance is the April 7 high at 60.13.  VIX may be in a period of strength today that may extend several more days.

The December 24 options chain is locked in a ferocious tug of war with Mas Pain at 16.00.  Short gamma is losing strength while long gamma bursts on the scene at 17.00, with strong outposts of institutional investors every 5 points  above 20.00, stretching to 35.00.

USD futures have made their Master Cycle low on Tuesday and are lingering near (retesting) their low.  The mid-Cycle resistance is close by at 98.85 and the 52-day Moving Average is at 99.21.  The Cycles Model proposes a burst of energy over the weekend that may propel the USD above all resistance levels.  Once accomplished, the next target level may be 104.00 or higher.  The initial breakout may last to early January.

TNX futures have made a morning low at 40.96 thus far.  this morning., testing the descending neckline and potentially making a Master Cycle low.  It may yet decline to the 52-day Moving Average at 40.83 before a reversal is made.  Today is a powerful reversal day, so stay tuned for that event.

ZeroHedge reports, “‘A grain of salt’ is how many have described their position on this morning’s government shutdown-delayed release of October and November Consumer Price Inflation data.

Headline CPI slowed to 2.7% YoY in November (dramatically below the 3.1% YoY expected)”

The Japanese Yen is declining in a half-Cycle low, thus far at 64.11, possibly to the Cycle Bottom at 63.73 today or tomorrow.  However, a breakout may be imminent as the Bank of Japan raises its benchmark interest rate.  Trending strength appears next week and may redouble its effect through the year-end.

Mainichi.jp reports, “TOKYO (Kyodo) — The Bank of Japan is widely expected to raise its benchmark interest rate from around 0.50 percent to around 0.75 percent, its highest level in 30 years, at its two-day policy meeting starting Thursday, as inflationary pressures remain elevated due in part to the yen’s weakness.”

Bitcoin rose to test Intermediate resistance at 89909.00. this overnight.  It has eased down since then and may be declining beneath the Cycle Bottom at 87910.00.  The Cycles Model suggests the “bottom may drop out” over the weekend.  A Master Cycle low may be found by the end of next week.

9:42 am

BKX is consolidating beneath its trendline at 165.00 and its Cycle Top at 168.45.  It is on an aggressive sell signal.  This signal may be “for real” as the Bank of Japan raises its benchmark interest rate from .50% to .75% tomorrow.  It may not seem like much, but consider that the is a 50% increase of the benchmark rate, not seen in 30 years!  Banks and other financial institutions have relied on the “nearly free” Yen carry trade to borrow money in massive quantities to leverage treasuries and other securities to produce gains on very thin margins.

Today troubled banks are being propped up financially through REPO.  The Secured Overnight Finance Rate (SOFR) is at 3.69%.  This is the cost of money to troubled banks.  At the same time, healthy bank deposits are paid as little as 0% to 1%, with time deposits earning higher rates.  This can be lucrative for banks who have a good customer loan portfolio earning 6-10%.  However, when the economy slows down, deposits evaporate and loans are often unpaid or in default, forcing banks to go to the REPO window to stay afloat.     One such bank has withdrawn $158 billion from the Federal Reserve coffers, as a result, the Fed reserves fell beneath $3 trillion, causing reserves to become “scarce.”  That is why the Fed had to cut its rate to 3.75% and restart QE early to refill its reserve.

Silver futures have stepped back to a low of 64.69 this morning from yesterday’s Master Cycle high at 66.88.  This pause in the rally may cause profit taking and a further reversal.  The Cycles Model suggests that silver may correct to as low as the mid-Cycle support at 41.32 in the next several weeks.  The real parabola has not yet begun.

ZeroHedge observes, “Parabolic

Silver trends have become steeper and stepper. (sic)”