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

8:20 am

Good Morning!

SPX futures declined to 6730.00 this morning, approximating the proposed decline at yesterday’s close. This morning’s bounce rose to 6848.10, which may allow the SPX to resume its decline to the futures low momentarily, triggering the Head & Shoulders formation. A decline beneath 6780.00 favors this view.  An alternate view is that, should the bounce go above 6860.00, it may be underway to the 52-day Moving Average and trendline currently near 6877.96, a nearly 50% retracement over the next two days.  In this situation, it may go even higher.  The current fractal allows either of these two possibilities.  Traders say a rebound is possible.  Resolution may be revealed shortly.

This morning’s options chain shows Max Pain at a highly contested 6850.00.  Long gamma may gain a foothold above 6875.00, while short gamma lies waiting beneath 6835.00.  On balance, the options market favors a further decline.

ZeroHedge reports, “US equity futures are poised to open higher with Software companies finally bouncing (as previewed here), even though Amazon continues to be deep in the red after its eye-watering capex outlook. US stocks will cap a bruising week in which a rush to unwind crowded trades – from AI shares to precious metals and crypto – triggered margin calls and amplified the market’s slide.”

The premarket VIX tested the Cycle Top at 21.53, then declined to 19.98 thus far this morning.  The rising fractal appears incomplete and may go higher today.  A probe aobve the trendline at 22.00 may allow this to happen. The alternate view may be a correction to mid-Cycle support at 17.11.

The February 11 options chain shows short gamma having the upper hand between 14.00 nad 17.00.  Long gamma has  an even stronger presence above 18, stretching to 40.00.  Hedging has begun.

TNX rose from Intermediate support at 41.98.  The correction may be over, or nearly so.  The Cycles Model suggests the buy signal remains, with strength returning to the uptrend by mid-week.  A rise aobve mid-Cycle resistance at 42.22 confirms the buy signal.

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

1:25 pm

SPX has left clues about its intended decline.  It appears that, once beneath 6800, it may fall to the next support near 6700.00, shown in the chart, where a bounce may ensue.   Should the bounce fail there, the next level of support appears near 6500.00.  There are billions of dollars in levered ETFs feeling the pain and commercials have hit their sell level, leaving a possible air pocket beneath 6800.00.

7:45 am

Good Morning!

SPX futures consolidated above the trendline overnight, testing Intermediate resistance at 6810.00. It has since declined back beneath the trendline and 52-day Moving Average at 6866.60, making new lows.  Semiconductors have joined software companies in leading the momentum sell-off.   Stock buybacks are at a low point and may go lower, considering that the electrical grid is already at capacity.  That means cheap energy is no longer available and data centers may have to build their own power supply.  Increasing capex may take precedence over future stock buybacks, since financing costs may be rising.  The choppiness in price movement, especially beneath 6800.00, may give way to a steady decline to mid-Cycle support at 6527.70, per the Cycles Model.

Today’s options chain shows Max Pain at 6920.00.  Long gamma may be found above 6945.00, whils short gamma resides beneath 6900.00.  Sentiment still leans toward long gamma, but that may change with more downside action.

The premarket VIX has risen to 21.18 thus far this morning, just beneath the Cycle Top at 21.46 and upper Triangle trendline near 22.00.  A breakout may trigger the hedging response by many, while short gamma may be taken behind the woodshed.    The Cycles Model infers that today may be a very strong trend maker for the VIX.  Let’s see if it breaks out.

TNX may be correcting back down to the Head & Shoulders neckline at 42.05 this morning.  No fireworks, just a steady rise in yields over the next two weeks.  The target remains at the Cycle Top at 45.17.

ZeroHedge observes, “Ahead of today’s much-anticipated quarterly refunding announcement by the US Treasury, some were hopeful that Bessent could pull an anti-Yellen and forecast a gradual decline in long-term issuance in coming quarters, sending yields lower. None of the happened, however, and instead the Treasury did not surprise markets, announcing that this quarter’s refunding total would come in line with estimates, at $125BN (to refund $90.2BN in securities).”

USD resumed its rally toward multiple resistance between 98.14 and 98.45.  It may be due for a pullback to the Cycle Bottom at 96.75 after testing the resistance band.  Trending strength may return later next week.

The Japanese Yen may have hit its Master Cycle low this morning at 63.72.  Watch for a bounce above the 52-day Moving Average at 63.98, which may emit a buy signal.  The rally out of this low may be short, but very sharp, as the Yen may rise precipitously to its Cycle Top in just 2-3 weeks.Once a breakout occurs, the rally may be fueled by short covering.  Those participating in the yen carry trade are also short the yen, and may have to reconsider their leverage options, as this may blow up their risk (payback) assumptions.

Bitcoin may be making its Master Cycle low today, having exceeded its Head & Shoulders target.  The Head & Shoulders formation has been noted in this blog since late November.  The Cycles Model calls for as much as two months of correction out of this magnificent low.  The first 3-4 weeks may be choppy, but critical to this rebound.  A buy signal may be found above the Cycle Bottom, currently at 76133.00.  Investor confidence in bitcoin may not return until it rises above the 52-day Moving Average at 88242.00.

Silver has pulled back beneath the 52-day Moving Average at 74.69 this morning.  Should the decline continue, it may seek support at the trendline near 60.00.  The mid-Cycle support is currently at 50.44, while the fractal model suggests a low near 42.00.  Nothing is in stone, just possible correction levels.  This is a Primary level correction, so we may expect a large one.  A final note…the uptrend is not over.  It is correcting for a much higher push.

ZeroHedge remarks, “Legendary financial and geopolitical cycle analyst Martin Armstrong warned in late December to be ready for the “Perfect Storm for Debt, Economy, War, Gold & Silver.” ”

Gold is correcting beneath the Cycle Top at 4876.00 this morning.  It also may show weakness down to the mid-Cycle support at 3836.67 in the next few weeks.

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

1:22 pm

Good Afternoon!

SPX has declined beneath the 52-day Moving Average and trendline, both at 6871.64 this afternoon.  This move offers a sell signal for the index.  Take appropriate action.  There appears to be no buyers of this dip.  Dealers may attempt to salvage a bounce back to the Max pain zone near 6930.00 by the close.  However, should that attempt fail beneath 6880.00, a larger decline may ensue.

8:15 am

Good Morning!

Yesterday SPX declined from the 7000.00 barrier to test the 52-day Moving Average and Ending Diagonal trendline at 6861.10, then bounced.  This morning SPX futures rose to 6941.80, a 61.8% Fibonacci retracement, then fell back  It is currently hovering near the 50% retracement level.  Today is likely to see another test of the 52-day and trendline.  A breakdown may be imminent.   The Cycles Model suggests that a breakdown may lead to a 2-month decline.  The initial target may be the April 2025 low at 4835.04.

Today’s options chain shows Max Pain at 6930.00.  Long gamma emerges above 6940.00 while short gamma dwells beneath 6925.00.

Today’s premarket VIX declined to 17.47, remaining above the 52-day Moving Average at 16.70.  The buy signal persists.  The wide-ranging moves may be in preparation for a breakout.  The Cycles Model anticipates a burst of energy following today’s options expiration.

The February 11 options chain shows  short gamma below 17.00 while long gamma rules above 18.00.

TNX may be consolidating beneath 43.00 this morning.  It may continue its correction by revisiting the Head & Shoulders neckline this week.  From there a steady uptrend may ensue.  The current Master Cycle may terminate near the Cycle Top at 45.20 in about two weeks.

ZeroHedge reports, “Ahead of today’s much-anticipated quarterly refunding announcement by the US Treasury, some were hopeful that Bessent could pull an anti-Yellen and forecast a gradual decline in long-term issuance in coming quarters, sending yields lower. None of the happened, however, and instead the Treasury did not surprise markets, announcing that this quarter’s refunding total would come in line with estimates, at $125BN (to refund $90.2BN in securities).”

USD continues its consolidation to gather strength for the next push higher.  It may probe to Intermediate resistance clustered around the 52-day Moving Average at 98.43.  A break out above it may occur by mid-February.

Bitcoin bounced from its low at 72882.55, testing the Cycle Bottom resistance at 76802.00.  The Cycles Model anticipates a final probe to its Head & Shoulders target in the next couple of days.

Silver found support at its 52-day Moving Average on Monday.  This has encouraged retail dip-buyers to pile in, pushing silver back above its Cycle Top resistance at 86.71.  Should the dip buyers persist, silver may burst to a new all-time high over the weekend.  The question is, will silver continue appreciably higher in an inversion of the Cycle, or will it collapse down to 60.00 over the next two months…or both?  Trading volume has tapered off, giving the impression of limited liquidity.  Should silver surpass 100.00, buyers ma be enticed back in.  Expect volatility to rule the moves.

Gold futures were repelled at the trendline near 4900.00 today after bouncing from their 52-day Moving Average at 4471.00.    A breakout may encourage speculators to bravely buy more, leading to a possible breakout above the high.  But first it must rise above resistance.  Should it go higher, 6000.00 may be the next logical target.

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

3:50 pm

Last week SPX hit its price target.  Today would have been the last day of this Cycle had it not achieved 7002.28 last Tuesday.  The result was that SPX came within 10 points of the all-time high today, having met both time and price for this Master Cycle.

ZeroHedge observes, “Market cycles are once again at the center of the investment narrative as we head into 2026. The optimism is familiar as earnings held up in 2025, the economy avoided recession, and big tech lifted the indexes. However, those victories are already reflected in the price.”

8:00 am

Good Morning!

SPX futures plummeted to a weekend low at 6840.30, challenging the 52-day Moving Average and Ending Diagonal trendline at 6851.72 before regaining higher ground at 69000.00 this morning.  This is the beginning of a broken market, with more selling to come.  Whatever declines that are made today may be redoubled in the next few days.

Today’s options chain shows Max Pain at 694.00.  Long gamma emerges above 6950.00 while short gamma dominates beneath 6925.00.

ZeroHedge reports, “Stock futures slide extending Friday’s rout, although are well off session lows, with aggressive unwinds across commodities and a crypto rout adding to the risk-off mood and sparking cross-asset margin calls.”

The premarket VIX rallied to 19.96 before easing back.  The upper trendline and Cycle Top at 21.76 may be the next to fall.

The February 4 options chain shows short gamma occupying the range from 14.50 to 16.00.  Long gamma rules above 17.00 with the largest concentration  of calls beneath 25.00.

TNX may be working on a deferred period of strength as the Head & Shoulders neckline was tested and held.  The Cycles Model may allow the TNX to rise to the Cycle Top at 45.23 over the next three weeks.

USD futures emerged above the Cycle Bottom at 96.76, creating a buy signal.  This may not be recognized until it rises above its January 16 high at 99.49.  The Cycles Model suggests a burst of energy may be due shortly that may challenge the resistance cluster at 98.48.  The USD may continue its rally through mid-March in the current Master Cycle.  The rally is not being anticipated by the majority of traders.

Bitcoin bounced from its weekend low at 74579.00 to test the Cycle Bottom at 77750.00.  It may be due for another deep dive to its Head & Shoulders minimum target over the next few days.  Once accomplished, bitcoin may be due for a relief rally that may last to the end of February.

Silver futures have resumed their decline after its Friday rout, taking out the Cycle Top at 85.74, then bouncing from its low to retest it.  This move has been simply too fast to trade.  It may continue the decline to test the 52-day Moving Average at 72.74 in the next few days as the dust settles.  The  sell-off was due to a couple of large banks that had shorted silver on margin, thinking that the top was in.  Friday was a margin call day, forcing the massive selling, with more to come.  However, this may not be the end of the bullish Cycle, as buyers are lined up to buy the dip.  In a few more days, the rally may resume to test the top again.  February may be chaotic as actual profit taking may ensue as the high is being approached.  The bull market isn’t over, but it may be more difficult to make money in the days to come.

Crude oil made its Master Cycle high last Thursday with a strong reversal day on Friday.  Over the weekend it plummeted to a low of 61.43 before bouncing back to the mid-Cycle support/resistance at 62.34.  That movement may have precipitated a sell signal.  If so, the Cycles Model infers a decline to mid-March that may fulfill the Head & Shoulders target shown in the chart.

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

7:30 am

Good Morning!

SPX futures declined to 6890.90 in the overnight session, a retest of the Intermediate support at 6897.17.    You may recall the mention of that same support being taken out by the SPX yesterday before its bounce back to Max Pain at the close.  In my options discussion, yesterday, I mentioned that the dealers would be highly motivated to claw back their losses before the close, above 6930.00.  In fact, the took the SPX back to 6969.01, within 6 points of Max Pain (the smallest dealer payout) at 6975.00.  Studies show that over 90% of all options either expire worthless or are sold at a loss.  Yesterday’s action possibly shows the machinations of Wall Street to make that happen.  After careful study of yesterday’s action, I have concluded that my closing comments may have been understated.  Today’s target may be the support levels constituted by  the 52-day Moving Average at 6847.84 and straight line support at 6825.00.  An afternoon bounce may ensue, setting up a possible panic decline on Monday.

Today’s options chain shows Max Pain has been lowered to 6930.00.  Long gamma rises above 6950.00 while short gamma begins beneath 6920.00.  Dealers are expecting a loss, but may be underestimating the amount.

ZeroHedge reports, “US futures slumped, the dollar rallied sharply, the Treasury curve steepened with 10Y yield rising as high as 4.28% and gold and bitcoin tumbled on what was at first speculation and then confirmation, that President Trump is nominating Kevin Warsh – widely viewed as the most hawkish of the handful of candidates – as the next Fed chair.”

The premarket VIX rose to 19.27 this morning before pulling back to 17.71 thus far.  It regained the ground above above the 52-day Moving Average at 16.90.  The Cycles Model suggests wild swings may occur in the VIX until a breakout above the Cycle Top and trendline at 21.93 occurs.

The February 4 options chain shows short gamma between 14.50 and 16.00.  Long gamma becomes firmly established above 17.00.  Calls are heavily concentrated between 17.00 and 22.00.  However, there are growing commitments as high as 60.00.

The 10-year US Treasury yield has moved above the mid-Cycle support at 42.26 this morning.  The Cycles Model suggests a burst of trending energy today followed by a continued rally to the week of February 16. The Head & Shoulders  formation  targets a minimum target at 44.61, while the Cycle Top at 45.23 remains the possible ending price for the current Master Cycle.  Meanwhile, hedge funds exposure to Treasuries has been rising over the last two weeks.

ZeroHedge reports, “After a solid 2Y, and a dismal 5Y auction, moments ago the Treasury completed the sale of the week’s final coupon, and today’s sale of $44BN in 7Y paper was appropriately enough, mediocre at best, not terrible, not great, in the parlance of our times.”

USD has reversed out of its Master Cycle low on January 27 and is building up strength for a breakout above the Cycle Bottom resistance at 96.75.  The Cycles Model suggests the breakout may occur over the weekend.  Rising above the Cycle Bottom offers an early buy signal.  Most traders won’t recognize the change in trend until it surpasses the 52-day resistance at 98.50 or a breakout above its last high at 99.49.  The Cycles Model calls for a rising USD until the week of March 16.  A breakout above the November 21 high may spark a huge short-covering rally, possibly starting in mid-February.

Bitcoin may be testing its November low at 80562.00 this morning.  The Cycles Model suggests a week may be left to complete its decline  to (or possibly beneath) the Head & Shoulders target.  However, the following week also appears to be chaotic.

Silver broke beneath 100.00, making a low at 95.20 this morning.  Its wide-ranging move yesterday spoke of rising volatility and thinning liquidity.  The Cycles Model suggests  a possible 2-month unwind that may go to the mid-Cycle support, currently at 49.33.

Zerohedge remarks, “Always

Parabolic moves don’t fade, they always break. We warned in Silvergeddon earlier this week that silver was morphing into a GameStop-style momentum squeeze, built on leverage and late chasing. That setup is now unraveling, with the ongoing crash inflicting huge P/L pain.”

Gold is in full retreat after making a high at 5595.61 (futures show 5645.60 due to backwardation)  yesterday, with a possible bounce  at the trendline near 5000.00.  A sell signal awaits the decline beneath 5000.00.

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

3:20 pm

SPX may have completed its second bounce. The  bounce may have been motivated by dealers attempting to get the SPX out of short gamma beneath 6930.00.  It may be followed by a decline to the 52-day Moving average and trendline in a support zone between 6825.00 and 6852.00.   Since there may be $40-$5 billion of possible CTA redemptions beneath that level, there may be another bounce back above 6930.00 over the weekend to avert a crisis.  The deferred panic may arrive next week as volatility ramps higher.

10:32 am

SPX is approaching Intermediate support 6895.00.  A decline beneath it produces a possible sell signal.  This is starting to look serious.

ZeroHedge comments, “…aaaand it’s gone!”

8:15 am

Good Morning!

SPX futures rose to 7002.00 this morning, beneath the futures high at 7014.80 made yesterday.  The Cycles Model may allow a marginal new high today.   There is a trading band resistance at 7017.19, giving a possible limitation above 7000.00, round number resistance.  There appears to be a psychological magnet at round numbers that attract, but also repel, once accomplished, so SPX may be at an important turning point.

Today’s options chain shows Max Pain at 6975.00.  Long gamma may emerge above 6990.00 with call strength above 7030.00.  Short gamma rises beneath 6930.00 and strengthens beneath 6900.00.

ZeroHedge reports, “Futures are higher, led by tech, after the first batch of Mag7 earnings with gold breaking new record highs again, rising as high as $5600. As of 8:00am ET, S&P futures are up 0.2% while the Nasdaq if barely in the green…”

The premarket VIX is consolidating just beneath the 52-day Moving Average at 46.91 this morning.  The VIX tends to give advance notice of possible trend changes in the SPX.  A cross above the 52-day Moving Average in the VIX may precede a possible decline beneath the 52-day Moving Average in the SPX by just a few days.    The Cycles Model suggests the VIX may begin to rise in earnest today.

The February 4 options chain show Max Pain at 16.00.  Short gamma shows up in 14.50 to 15.00.  while long gamma rises above 17.00 with some conviction up to 30.00.  Thee appears to be very little fear.

TNX appears to be resting in place, but that may soon change, as the week may end in yet another surge of trending strength.  $200 billion of short term treasury bills are scheduled for auction today, along with $44 billion of 7-year notes.  The rally may extend for three more weeks with a potential target at the Cycle Top resistance at 45.24.

USD is consolidating above its Master Cycle low , but beneath the Cycle Bottom resistance at 96.25, above which a buy signal may be made.  A burst of energy may propel the USD above resistance this weekend, sending it on a rally that may last to mid-March.  USD shorts may panic as it rises above the multiple resistance at 98.52.

The Japanese Yen is consolidating today, with a potential resumption of its rise from its Master Cycle low.   The Cycles Model indicates another week of possible rally prior to a correction back down to the trendline. at 64.75.  Japan’s snap election on February 8 may change the trajectory of the Yen temporarily in a possible double directional change in February.   In the meantime, the BOJ decided not to raise interest rates again from .75% to 1.00% for the time being.

Bitcoin has reversed away from its Intermediate resistance at 90705.00 as it resumes its decline toward the Head & Shoulders target.  While the current Master Cycle may only have a week left in its proposed tour, panic may set in to drive BTC down toward its target.  Should the decline last more than a week, a double panic decline may  ensue the following week.  Keep alert.

Silver futures rose to 121.75 this morning, in a super-extended Cycle.  While this Maser Cycle is beyond its normal boundaries, the Cycles Model shows a potential pivot due tomorrow.  When it occurs, the Cycles Model anticipates a correction lasting to early April.  There are powers that may be interested in driving the price of silver down by 50%.  The Cycles may accommodate them.

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

8:45 am

Good Morning!

SPX futures probed Cyclical resistance at 7010.00 this morning, rising to a high at 7014.80.  Whether it rises above 7000.00 in the regular session remains to be seen.  There is a fractal limitation for this rally near 7050.00, but that does not seem to be a target today.  Trump celebrated the SPX topping 7000.00 this morning, but a gamma wall lurks above 7030.00.  The probability of a Key Reversal is high in the next few days.

Everyone is max long, with leverage, expecting the Mag 7 to post blow-out earnings.  NDX futures have reached  26225.00 this morning, exceeding the October 29 high at 26182.00.

Today’s options chain shows Max Pain at 6855.00.  Long gamma prevails above 7000.00 while short gamma dominates beneath 6925.00.

ZeroHedge reports, “US equity futures are rallying into record territory, led by Tech as overnight earnings (ASML, SK Hynix, STX, TXN) boost the group and help fuel the AI trade, perhaps pausing the broadening theme. As of 8:00am ET S&P futures are up 0.2% pointing to a sixth-straight advance that would mark the longest winning run in almost seven months and will push the S&P 500 cash index above the 7,000 mark for the first time when US markets open…”

The premarket VIX rose to 16.52 this morning, remaining beneath the 52-day Moving Average at 16.93.  The VIX may be poised to rally significantly starting this week, according to the Cycles Model.  The December 24 low at 13.38 marks the beginning of the next phase of the uptrend established from a low of 10.62 in July 2024.

The February 4 options chain shows Max Pain at 16.00.  Short gamma is waning, while long gamma is concentrated above 17.00, with a long call wall at 60.00.

The US 10-year bond yield futures rose to 42.53 this morning, above the 200-day Moving Average at 42.34.  This reiterates the buy signal.  Trending strength picks up by the weekend while the Cycles Model indicates a rising yield to the week of February 16.  The nearby target may be the Cycle Top resistance at 45.25.  However, it may rise considerably more, once above that resistance.

ZeroHedge reports, “If yesterday’s 2Y auction was stellar, today’s 5Y sale was the opposite.

Just after 1pm, the US completed the sale of $70BN in 5Y paper at a high yield of 3.823%, up from 3.747% one month ago and the highest since July. It also tailed the When Issued 3.820% by 0.3bps, the 7th tail in the last 8 auctions.”

The USD index made a rebound from its Master Cycle low this morning, rising above the trendline at 95.80.  This may be considered an aggressive buy signal, with confirmation above the lower trading band at 96.75.  The expectation of dollar weakness may persist until it rises above its multiple resistance cluster around 98.54.  Trump’s comments imply a tacit endorsement of a weaker USD.  The primary reason may be that a weaker USD strengthens our  balance of trade.  However, that may not last as the Euro simultaneously made its Master Cycle high.

The Euro Index made its Master Cycle high yesterday, ending a year-long rally.  It has been trending inversely to the USD during that time.  The strength of the Euro belies the economic rot underneath.  The politicians have run out of options, other than to blame the US for its woes.  Many European companies have migrated to the US due to its economic advantages over the European economy.  The Cycles Model indicates the plunge in the Euro starts today and strengthens over the weekend.

Bitcoin tested its 52-day Moving Average this morning at 90042.00 before pulling back.  The Cycles Model suggests there may still be some life in the retracement.  A possible extension to 92000.00 may be in order over the next few days.

Silver futures rose to 116.11 this morning, short of its al-time high at 117.69.  Traders remain convinced that silver may go higher, predicting a “failure to deliver” in March. However, the Cycles Model anticipates a substantial decline through early April.  Things may not work out as the experts all agree.

ZeroHedge observes, “The rally in precious metals continues unabated. And, in particular, silver’s implied volatility has exploded since the beginning of November and is currently trading at 77.1%, a full 46 percentage points higher. Are we in a silver bubble? Brett looks at four critical factors, using options data from OptionMetrics and other data sources, that may hold the answer.”

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 rose to 6977.70 this morning, before backing down.  There is an even chance of rising to a new ATH, but with limitations, due to the rather flat trading channel.  The Current Cycle Top resistance is at 7003.00 with the possibility of a breakout high toward 7024.00.  The current Master Cycle may end this week, so the prospects for an  imminent reversal are rising.  Whether the rebound rises above 6986.33 or not, this final move may be considered a fifth (and final)Wave.  While the NDX futures are up to a high of 25916.00 this morning, the DJIA futures are down 270.00 points this morning.  Neither appear in a  position to make a new ATH at this time.

Today’s options chain shows Max Pain at 6955.00.  Long gamma rules above 6980.00 while short gamma dominates beneath 6950.00.  A call wall is in place at 7030.00.

ZeroHedge reports, “US futures are higher, led by Tech, and approaching record levels from earlier this month as geopolitical and headline risk subsides while the market focuses on looming Mag 7 earnings and Wednesday’s Fed decision is expected to be a non-event. Equities are poised for another attempt at 7k.”

The premarket VIX is consolidating above 15.98 as it rises from its Master Cycle low made on January 22.  Net short positions in the VIX are the highest in a decade among asset managers.  Conditions are such that, should VIX rise above its 52-day Moving Average at 16.95, short covering may add fuel to a rally later this week and into next.

Tomorrow’s VIX options expiration shows Max Pain at 17.00.  Massive short gamma positions reside from 15.00 to 16.00.  Long gamma strengthens above 18.00 and rises to 40.00.

TNX rose above mid-Cycle support at 42.28 this morning, confirming the buy signal made by the breakout above the neckline of the Head & Shoulders formation at 42.05.  A resumption of trending strength may reappear by the end of the week.  The Cycles Model suggests the uptrend may continue to the week of February 16.  A likely target may be the Cycle Top at 45.25 by then.  The upcoming auction of $70 billion of 5-year Treasury notes is scheduled for today in a light auction week.

ZeroHedge reports, “The first coupon auction of the week just took place, and it could not have gone any better.

According to the US Treasury, $69BN of 2 Year paper was just sold at a high yield of 3.580%, up from the 3.499% in December, and stopped through the When Issued 3.594% by 1.4bps, the biggest stop through since August.”

USD made a new extended Master Cycle low at 96.40 this morning.  It is testing a massive trendline that existed since 2011, currently just above 96.00.  Despite the naysayers, the USD is merely making an intermediate low in a series of lows rising from 70.70 made in 2008.  Dollar shorts have ruled the roost since January 2025 and now are in need of a change in direction.  The Cycles Model anticipates a surge out of the low by this weekend.

The Japanese Yen continues its rally from its Master Cycle low made on January 13.  The Cycles Model suggests up to two more weeks of rally off the low.  It suggests that the month of February may be a very busy month.

Bitcoin is easing back from its retracement high at 88015.00 this morning.  It may continue by retesting the 52-day Moving Average at 90035.00 over the next few days, completing a Master Cycle high.

Silver futures rose to 113.44 in the overnight session, but is trading at a premium to the cash market.  It appears that the high of 117.39 was made yesterday.  It is uncertain on how it may show up in the cash market today, which doesn’t get reported until the end of the day.  However, it appears that a high may have been established.

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 6850.90, edging toward the 52-day Moving Average at 6835.98 and a trendline support level at 6825.00.  SPX has been bouncing back and forth around the 6825.00 trendline since early December, essentially going nowhere.  More importantly, the Ending Diagonal  trendline has risen to 6815.00-6820.00. The Cycles Model recognizes the January 12 high at 6986.33 as, not only the all-time high, but the end of a Major 25.8-year Cycle, dating from the March 23, 2000 high.  This information tells us that, despite the upward slant of the price movement thus far, a breakdown may be imminent.  It has been a good run, but time to take profits.

Today’s options chain shows Max Pain at 6830.00.  Long gamma doesn’t begin until 6950.00, while short gamma becomes strong beneath 6925.00.  Little wonder the price action this morning brought the futures back to 6920.00.

ZeroHedge reports, “US equity futures are weaker but have retraced much of their overnight lows as geopolitics and USD/JPY roil markets ahead of a significant earnings week, as Mag7 earnings reports kick off this week.”

Pre-market VIX rose rom its trendline to 17.39 over the weekend, rising above the 52-day Moving Average at 17.01 and giving a buy signal.  Although the VIX has since declined back beneath 17.00 this morning, we look for the rally to resume above that level.  Asset managers have the highest net short position in VIX in a decade while hedge funds have their highest net short position in the past 2 years.  While the Master Cycle projects being completed by the end of the week, the possibility of a 1-week extension is rising.  A spike rally may bring about massive short covering.  A possible target at 60.00 persists.

The Cycles Model shows Max Pain at 17.00.  While there is a significant overhang of short gamma at 15.00-16.00, long gamma begins strongly above 18.00 and is well populated up to 40.00.

US 10-year Bond Yield futures dropped to 41.98 over the weekend, but the cash market shows a low of 42.13, above the Head & Shoulders neckline at 42.05.   The retracement may be complete, allowing yields to regain their upward mission.  The way is clear above the mid-Cycle at 42.28 with the 200-day Moving Average at 42.35.  The Cycles Model suggests a burst of energy may propel the TNX higher today, with the uptrend resuming through the end of the month.

ZeroHedge observes, “I think coordination and cooperation between the Fed, Treasury, and the admin is good. It doesn’t defeat “independence” and has happened in the past – typically, in times of stress, with COVID being the most recent example. I continue to believe the announcement that the Fed would buy fixed income ETFs changed the trajectory of the corporate bond market overnight.”

USD futures made a weekend low of 96.95 while the cash market opened with a low at 97.00 this morning.  Either way, the Master Cycle may have completed its downside mission this morning.  The Cycles Model calls for a new Master Cycle that may last until mid-March.  The dollar haters (mostly European)may not like the rising USD and the Model suggests that, once the USD crosses back above 100.00,possibly tis weekend, short covering may be akin to adding gasoline to the flames.

The Japanese Yen gapped higher over the weekend, breaking out above a critical support/resistance area at 64.75.  This breakout may put a serious crimp on global liquidity, as many banks and hedge funds are leveraged through the Yen carry trade.  This move has added 3.5% to the loan principal that must be repaid  over the past two weeks.

Bitcoin is bouncing from a new 2026 low at 86008.00 this morning.    The Cycles Model allows another two weeks or so of decline, so the Head & Shoulders target is still in play.  The most likely path may be a further decline with the Cycle Bottom being the next possible target, despite the oversold condition.  The first week of February shows bitcoin may be vulnerable to a panic sell-off.

Silver futures are making a new high at 113.620 thus far.  The new highs are stretching the Master Cycle, heightening the risk of an impending sell-off.  The main driver of this rally is China, one of the largest producers of silver, putting export controls as of January 1, 2026 on silver, along with rare earth materials.  Reduced supply is coupled with increased demand, creating what seems to be a never-ending rally.  In addition, perpetual deficits are heightening awareness that the endgame is imminent for multiple governments, enhancing demand for precious metals.  Capital controls may put a temporary chokepoint on the rally in silver and gold.  Silver, especially has industrial and defense uses, moving the US to create a strategic silver reserve.  Confiscation may not be far away.

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

3:40 pm

Note my earlier comments on the USD.  This move has expanded the correction and the Master Cycle.  It may be over, or nearly so.  This makes more sense from the Cycles perspective.  This morning I noticed something odd about the USD Cycle.  This afternoon explains it all.

3:05 pm

The Japanese Yen has suddenly forged higher, above the 52-day Moving Average at 63.92.  It may be on a buy signal.  This may alter the liquidity picture worldwide, as the Yen carry trade may be threatened.  The Fed has called for a rate check, which may be a warning that a large move such as this may be problematic at many levels.  The Cycles Model suggests this move may last 2-3 weeks.

2:05 pm

BKX has declined beneath its Intermediate support at 166.05.  This confirms the sell signal.  Note the chart above.  The demise of the Yen carry trade may put a big dent in bank earnings.

7:45 am

Good Morning!

SPX futures declined to 6893.40 thus far this morning, falling beneath Short-term support at 6903.00.  Retail investors dropped $12.9 billion into stocks on Tuesday alone, bringing up the Y-T-D total to $45 billion.  Commentators credit that surge to Trump’s “backing down” (TACO) on tariffs.  The real cause of this surge may be more complex, as pension and profit sharing plans were required to make their annual contributions by January 15, most of which went to index mutual funds.  That money may have finally been “put to work” on Tuesday. The mutual fund managers simply took advantage of the dip. The press took the easy way out, citing a possible coincidence, not the real probable causation.  It made a good headline.  The Cycles Model offers short-term support at 6905.00.  Intemediate support lies at 6883.00.  Prepare for an active day where a decline beneath 6900 may bring a surge of selling.

Today’s options chain shows Max Pain at 6910.00.  Long gamma may begin above 6925.00 while short gamma strengthens beneath 6900.00.

ZeroHedge reports, “US stock futures are lower with tech stocks lagging as Intel plunged 14% after the chipmaker warned it was struggling with manufacturing problems leading to poor Q1 guidance.”

The premarket VIX rose to 16.21 this morning.  Despite the pullback, VIX is on a buy signal.  Confirmation comes above the 52-day Moving Average at 17.07.  The Cycles Model shows another week of rally in the current Master Cycle.  However, that may extend into the first week of February.  A very strong Wave 3 is due to arrive imminently.

The January 28 options chain shows a heavy concentration of puts (short gamma) beneath 17.00.  Long gamma starts at 18.00, but not heavily entrenched as of this morning.

TNX may have bounced off the mid-Cycle support at 42.28, or the 200-day Moving Average at 42.35 this morning. Commentators consider the price action in TNX  to be mean-reverting.   However, the Cycles Model suggests the 10-year yield is due to a double boost of strength due this weekend that may propel it toward the Cycle Top resistance at 45.25.

This morning I woke up to the outside temperature at 0 degrees with a wind chill of -17 degrees.  The weekend temperatures are expected to be downright brutal in the Midwest with an expected low tonight in my location of -15 degrees.    Wind chill may be considerably worse.

Spot prices for natural gas shot up nearly 34% in the past month as   consumers in many states may pay considerably more, as preparation for a massive storm event was sorely lacking.

ZeroHedge observes, “US natural gas futures surged as much as 75% over the past week, well above $5/mmBtu, driven by sharply colder weather forecasts (comparable to the 2021 Uri storm that paralyzed Texas’ power grid), ongoing production freeze-offs, and a vicious market trap for bears that unleashed epic short covering.”

USD futures may be i their final corrective phase today.  The Cycles Model suggests a strong surge of trending strength may be imminent.  The Cycles Model shows something odd…The next four weekends show powerful surges, with the current Master Cycle continuing to mid-March.  The inference may be that news events affecting the market may be postponed to the weekends to stifle a negative market reaction.  In the meantime, we may expect one of the longest and strongest trending moves over the next month or more.  Shorts will not be welcome.

Bitcoin may have completed the back-testing of the 52-day Moving Average at 90587.00 this morning, leaving it to resume its decline to the Head & Shoulders target.  The Cycles Model suggests bitcoin may reach its target in the next 2-3 weeks.

Silver has exceeded its price target of 100.00, rising to 101.68 thus far.  While it may go nominally higher, it has achieved it mission on an extended Master Cycle.  Prepare for an imminent reversal..