VIX probed slightly higher than the previous week on Monday, but couldn’t hold its altitude, closing beneath its weekly Cycle Top at 20.21. The Cycles Model weakness discussed last week came into play through Friday. However, this weekend is an important Cycle Pivot that may allow the rally to resume through the end of the month.  

(Crain’sChicagoBusiness)  here's another fight brewing over market data fees. Clients contend they're too high, the SEC is mulling a crackdown—and the exchange is pushing back.

"Angry Chris" Concannon was on full display at a Securities & Exchange Commission meeting in Washington recently to discuss stock market data fees.

Concannon, president of Cboe Global Markets, a major U.S. stock and stock option exchange, described himself that way in a futile attempt to defuse a public battle with clients over what they called "greedy" and "unconscionable" fees.

SPX retests the trendline

SPX retested its 2.5-year trendline, closing beneath it and maintaining its sell signal. It also closed well beneath its weekly Long-term support at 2764.81. Technicians call this action “The Kiss of Death.”  The Cycles Model now implies a three-week decline that may test its weekly Cycle Bottom at 2084.48.

(Bloomberg)  Halloween’s here and for investors, October has been all trick and no treat.

The S&P 500’s decision to dress up like Niagara Falls for the holiday isn’t the only scary sight across global markets, according to analysts.

A compilation of Wall Street’s ghoulish graphs showcases concern about the impact of rising rates, the longevity of the U.S. business cycle, the state of the world’s second-largest economy, and the current swoon in stocks. Here are the charts that give the professionals nightmares.

NDX really retests Long-term resistance

NDX made a new low on Monday and spent the rest of the week regaining the losses. It rose back to its Long-term resistance, but could not overcome it, closing beneath it. NDX remains on a sell signal. The Presidential Cycle usually finds a bottom in October of mid-term elections. However, the Cycles Model suggest further declines through the Month of November.

(CNBC)  The Nasdaq closed up 1.75 percent Thursday, starting November on an upswing. But as Apple slid 7 percent after hours, briefly dipping below its $1 trillion market cap, the Nasdaq lost most of its gains from the day, slipping 1.72 percent in postmarket trading.

Several other tech giants saw notable after-hours drops after Apple reported earnings, including Amazon (down 1.5 percent), Facebook(down 1 percent) and Netflix (down about 2 percent).

Although it beat analyst expectations on revenue and earnings per share, Apple missed estimates for iPhone sales, reporting 46.89 million compared to analyst predictions of 47.5 million according to FactSet and StreetAccount.

Apple projected $89 billion to $93 billion revenue for its first quarter, just shy of analyst estimates of $93.02 billion.

High Yield Bond Index retesting resistance

The High Yield Bond Index has made a new low before a retest of the long-term trendline. It is on a sell signal. High yield bonds are also anticipating further weakness through the end of the November.

(Bloomberg)  It’s the worst October for U.S. junk bonds since 2008.

This month is typically a good one for high yield, but October is on track for the biggest loss since December 2015 as equity volatility, earnings and trade worries weigh.

U.S. high yield’s 1.81 percent drop so far this month is exceeded only by the 1.87 percent decline for global high yield, making it the second-worst performer of all the main bond market indexes. October has been positive for high-yield bonds in every year since 2008, when the market tumbled almost 16 percent in the month.

UST loses support

The 10-year Treasury Note Index fell from Short-term resistance at 118.58, erasing the prior week’s gains. There is an Expected Master Cycle low in the next week or so.

(CNBC)  U.S. government debt yields rose Wednesday morning after a report showed that companies continued to hire at a quick pace in October, suggesting further economic strength.

ADP and Moody's Analytics said private payrolls increased by a better-than-expected 227,000 over the month; economists polled by Refinitiv had expected growth of 189,000 positions. Construction and manufacturing each added 17,000 each, according to the report.

At around 4:02 p.m. ET, the yield on the benchmark 10-year Treasury note, was higher at around 3.149 percent, while the yield on the 30-year Treasury bond was also higher at 3.391 percent. Bond yields move inversely to their prices.

The Euro declines further beneath mid-Cycle support/resistance

The Euro made a new low before rising to test mid-Cycle resistance at 114.75. The period of consolidation may be over. The decline may resume through mid-November.   

(Reuters) - A slump in the euro zone’s biggest trading partners’ currencies this year is blunting any boost that the euro’s weakness versus the dollar could provide the region’s exporters.

Two months before the European Central Bank is scheduled to begin winding up its crisis-era bond-buying program, the task is being complicated by signs that the bloc’s economic momentum is running out of steam, and the euro is not helping.

While the single currency's 5 percent drop against the dollar EUR= in 2018 has captured the headlines, in "effective" terms it is roughly flat since January and close to four-year highs.

EuroStoxx bounces

The EuroStoxx bounced out of its Master Cycle low, but rallied short of its Head & Shoulders neckline at 3270.00.  The decline did not meet its potential Head & Shoulder target. However, it appears that the decline may resume shortly, so the chart targets are still in play.

(Bloomberg)  With European shares headed for their best week since late 2016, the Red October is becoming easier to forget.

At first, much of it looked like just a standard rebound after a period of excessive selling. Then on Thursday, markets got some actual good news, with U.S. President Donald Trump tweeting about talks with China and reportedly preparing a trade agreement with the country. Even the long-suffering auto and mining sectors edged higher. Luxury and chemicals got a boost, as did technology shares that might otherwise be fretting more over Apple Inc.’s disappointing sales forecast.

.The Yen retraces its gains

The Yen pulled back from Intermediate-term resistance at 89.36 to consolidate beneath it. The Cycles Model calls for a probable two weeks of strength before resuming its decline to the proposed “point 6” in the structure of the Orthodox Broadening Top.  

(AsahiShimbun)  The safe haven yen slipped and the Australian dollar extended its rally on Friday as an apparent de-escalation in the U.S.-China trade war gave market confidence a significant boost in Asian trade.

News of a phone call between U.S. President Donald Trump and Chinese President Xi Jinping raised hopes of an easing in U.S.-China trade tensions.

Investor sentiment was given a further shot in the arm on Friday after Bloomberg reported that Trump had asked U.S. officials to begin drafting a possible trade deal with China.

Against the safe haven yen, the dollar was up 0.3 percent at 113.03 yen, paring the previous day's losses.

Nikkei claws back losses, but not enough to change the trend

The Nikkei regained a large part of last week’s losses, but did not rally to the trendline and Long-term resistance at 22455.23, as suggested last week. The Cycles Model suggests that it may be ready for a resumption of the decline that may last through the month of November.

(Reuters) - Japan’s Nikkei soared to 1-1/2-week high on Friday tracking gains on Wall Street, but electronics components makers languished after Apple’s conservative outlook disappointed the market.

Nippon Sharyo Ltd, the manufacturer of a train that derailed in Taiwan killing 18 people last month, plunged 17 percent to hit the daily limit low. It said it had discovered a design flaw that failed to alert the central control system that an automatic safety feature had been turned off.

The Nikkei share average rose 1.2 percent to 21,954.61 points by the midday break. For the week, the Nikkei has risen 3.6 percent.

U.S. Dollar makes a new high

USD extended its period of strength until Wednesday, when it made a new Master Cycle high. Since then it has pulled back, but hasn’t fallen through support. The action formed a new Broadening Wedge which may be triggered as it declines beneath the lower trendline at 93.00.   

(DailyFX)   The US Dollar is bouncing from support this morning after yesterday’s sizeable pullback. Yesterday saw 50% of the prior bullish breakout erased, with price action support coming into the currency around a key area on the chart at 96.00. This morning’s Non-Farm Payrolls report produced a beat on the headline number with a +250k print v/s a +190k expectation. The unemployment rate remained at 50-year lows of 3.7%, and Average Hourly Earnings came in hot at an annualized 3.1%.

- Next week brings a series of high-risk events, including US mid-term elections set for Tuesday. The following day brings FOMC, and while expectations for any actual changes at the bank are low, the statement will be parsed through for clues of response to the past month of weakness across US equities. This morning’s jobs report may make that difficult, however, as both job gains and wage growth have remained strong.

Gold bounced from Intermediate-term support

Gold bounced off Intermediate-term support at 1215.65, but did not make a new high. The Model calls for strength over the next two weeks, but it may be an inversion. Furthermore, gold seems to have completed a right shoulder of a potential Head & Shoulders formation and confirming prior downside guidance.     

(CNBC)  Gold slipped on Friday as the U.S. dollar regained some ground on the back of strong American jobs data, putting the metal on track for its first weekly loss in five weeks.

Spot gold was down 0.03 percent at $1,232.40 per ounce. The bullion was down 0.1 percent this week.

U.S. gold futures settled down $5.3, or 0.43 percent, at $1,233.30.

The dollar index gained after data showed U.S. job growth rebounded sharply in October and wages recorded their largest annual gain in 9-1/2 years.

Crude declines beneath Long-term support.

Crude broke through Long-term support at 67.28 and closed at the weekly low.  The sell signal is in full effect. The larger view is for a collapse in price through the month of November.

(CNBC)  Oil prices fell on Friday, posting a fourth consecutive weekly loss, as investors worried about oversupply after the United States said it will temporarily spare eight jurisdictions from Iran-related sanctions.

U.S. Secretary of State Mike Pompeo announced the decision in a conference call. The waivers could allow top buyers to keep importing Iranian oil after economic penalties come back into effect on Monday.

U.S. light crude ended Friday's session down 55 cents at $63.14, falling 6.6 percent this week.

Shanghai Index bounce is at resistance

The Shanghai Index may extend its bounce, but is up against Short-term resistance at 2684.63.  Furthermore, there are two more resistance levels just above 2700.00. These may be the ultimate block to a higher retracement.

(Bloomberg)  Foreigners didn’t wait long to set a new record for China stock buying.

Overseas investors heartened by optimism China and the U.S. can overcome their trade dispute bought 17.4 billion yuan ($2.5 billion) of China stocks via trading links with Hong Kong on Friday. That was more than double the record set a day earlier and erased all of October’s net selling, according to data compiled by Bloomberg.

Gains by China and Hong Kong stocks picked up in the afternoon after news President Donald Trump wants to reach a deal on trade with Chinese President Xi Jinping at this month’s Group of 20 nations summit. While the Shanghai Composite rose 2.7 percent on Friday, it is still down 19 percent this year amid worry over the trade dispute, China’s slowing economy and a weakening yuan.

The Banking Index bounces above mid-Cycle resistance

BKX bounced, creating a new potential Head & Shoulders neckline and challenged mid-Cycle resistance at 98.49. However, this brief period of strength may be over. A decline through the neckline may precipitate a panic decline beneath the Cycle bottom.

(Reuters) - Britain’s Barclays (BARC.L) and Lloyds (LLOY.L) were the surprise laggards in a European Union bank health check on Friday, although none of the 48 lenders tested failed a major capital threshold.

The EU’s banking watchdog published results on Friday for its toughest “stress test” since 2009, when it began the exercise to identify capital holes and avoid any repeat of the government bailouts triggered by the 2008 financial crisis.

The latest test measured banks’ ability to withstand theoretical market shocks like a rise in political uncertainty against a backdrop of plunging economic growth, a disorderly Brexit or a sell-off in government bonds and property.

While there was no pass or fail, banks unable to complete the “adverse” or toughest part of the test without preserving a capital ratio of well above 5.5 percent, could be forced by regulators to raise more capital, sell risky assets or curb their dividends.

(ZeroHedge)  ...the French megabanks are on the hook! France was just served with a stark reminder of an inconvenient truth: €277 billion of Italian government debt — the equivalent of 14% of French GDP — is owed to French banks. Given that Italy’s government is currently locked in an existential blinking match with both the European Commission and the ECB over its budget plan for 2019, this could be a big problem for France.

On Friday, France’s finance minister, Bruno Le Maire, urged the commission to “reach out to Italy” after rejecting the country’s draft 2019 budget for breaking EU rules on public spending. Le Maire also conceded that while contagion in the Eurozone was definitely contained, the Eurozone “is not sufficiently armed to face a new economic or financial crisis.” As Maire well knows, a full-blown financial crisis in Italy would eventually spread to France’s economy, with French banks serving as the main transmission mechanism.

(MishTalk)  The Fed's proposal marks one of the most significant rollbacks of bank regulations since Trump took office.

The Wall Street Journal reports Fed Proposes Looser Rules for Large U.S. Banks . The Federal Reserve announced one of the most significant rollbacks of bank rules since President Trump took office with a proposal for looser capital and liquidity requirements for large U.S. lenders.

The changes would affect large U.S. lenders including U.S. Bancorp , Capital One Financial Corp. , and more than a dozen others. The largest U.S. banks, including JPMorgan Chase & Co., wouldn’t see any significant rule changes, and some in the industry thought the proposal didn’t go far enough.