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.
12:07 pm

GKX (Agricultural Index) tested the mid-Cycle support at 375.56 this morning, making a 72% retracement low. While the retracement may go lower, the odds are high that it may be complete. The last two months have presented an opportunity to accumulate shares in anticipation of a very strong rally out of the low. The Cycles Model anticipates a potential rally into the third week of June. Owning agricultural commodities may be an ideal offset to declining stock prices.
ZeroHedge remarks, “During Tyson Foods’ earnings call on Monday, Brady Stewart—head of the company’s beef and pork supply chains—offered fresh insight into what may be the emerging bottom in U.S. cattle supplies, which have fallen to their lowest levels in over 70 years. His comments came in response to a question from one Wall Street analyst.
Barclays analyst Benjamin Theurer asked Stewart about the overall environment in the beef industry:
So it feels like you only had a small volume drop-in the quarter that could almost be explained by just the leap year and some of the calendar effects. So just wanted to understand a little bit better what you’re seeing in terms of supply of cattle and the cost of that into your operations and how you think about the earlier signs maybe as to some of the heifer retention? Is that building or not? So how should we think about just these throughout the cycle? Are we at the bottom or is it just still too early to tell? That would be my first question.
Stewart explained that while cattle supply remains down year-over-year, record-high animal weights are helping to offset the decline in volume. He added that the U.S. cattle industry is likely at or near the bottom of its inventory cycle, with herd levels now at a 73-year low.”
7:45 am

Good Morning!
SPX futures made a morning low of 5603.40 thus far. Should it go lower, the 50-day Moving Average lies at 5594.34. Beneath it lies a sell signal. The Cycles Model anticipates a decline to mid-June. Third Waves may never be the smallest of the series of motive Waves. Assuming a third Wave is next, the minimum target may be 4388.00 while the average target may be closer to 3550.00. Underneath the hood, the NYSE Hi-Lo Index closed at a marginal 34.00 on Friday, then closed at its low of 26,00 on Monday, at the tipping edge of its range. The mean value of the Hi-Lo is -30.00, so a reversion to the mean may plunge the Hi-Lo well into negative territory.
Today’s options chain shows Max Pain at 5655.00. Long gamma may begin at 5660.00 while sort gamma starts at 5650.00. This morning’s plunge has tested a sizable put wall at 5600.00.
ZeroHedge reports, “US equity futures slumped for the second day, dragged down by earnings and a lack of positive news on trade negotiations. As of 8:00am, S&P 500 futures dropped 0.9% as risk is pared into tomorrow’s Fed announcement and the index failed to breach through technical resistance; Ford slumped after suspending its guidance and warned tariffs will reduce 2025 adjusted EBIT by about $1.5 billion; Nasdaq futures 100 dropped 1.1%, with all Mag7 stocks lower as Tesla and Meta led declines. Palantir tumbled 8% after the software firm’s results failed to meet investors’ expectations, while Ford slipped 3% after the carmaker pulled its financial guidance and flagged a tariff impact of about $2.5 billion on 2025 earnings. German stocks tumbled Estoxx 50 after incoming German chancellor Friedrich Merz suffered a shock setback when he fell short of a majority in an initial vote in the lower house of parliament to confirm him as Germany’s next chancellor. The yield curve is twisting steeper as USD comes for sale. Commodities are higher with WTI crude oil futures rebounding more than 2% from Monday’s YTD low close and gold is marching back to its ATHs. Trade Balance data is the macro data focus.”


VIX futures rose to a morning high of 25.04, still short of the 50-day Moving Average at 25.98. On a 25-year look-back, the mean value for the VIX appears to be near 18.67. Note that last week’s low was above that value for the first time since April 2020.
Tomorrow’s options chain shows Max Pain at 24.00. Short gamma resides between 20.00 and 23.00. Long gamma may begin above 25.00 and extends to 40.00.
USD futures remain in a corrective decline to a probable target near 98.90 with a possible extension to the Cycle Bottom at 98.38. Once met, trending strength may reappear by the end of the week. The Cycles Model anticipates the USD rising to mid-June.

TNX may have begun consolidating after a sharp rise from its Master Cycle low. While a correction (pullback) to the 50-day Moving Average at 42.80 may be in order, the uptick may not be over. An expanded correction may push TNX to 44.00 or higher before the correction is complete.

Bitcoin continues to decline from its Master Cycle high mad last Friday. Confirmation of a sell signal lies beneath the mid-Cycle support/resistance at 93204.84. The new Master Cycle may decline to mid-June.

The Japanese Yen made a new high this morning at 70.13 after making its Master Cycle low last Thursday. The New Master Cycle promises to rise above its Cycle Top at 71.09 and the Lip of the Cup with Handle formation at 71.55. Should that occur, We may witness the source of a huge liquidity drain in the equities markets accompanied by higher rates in the bond market. Note that there is resistance at 79.46. Should the Yen fail to overcome it a new, deeper decline may ensue.

Gold futures rose to a morning high at 3405.71, exceeding the top of its correction at 3386.00. This may be an expanded correction that indicates an overly bullish sentiment in an overhanging market. The alternate view is that a marginal new high may occur by the end of the week.

Crude oil futures are consolidating before a possible final decline to a three-year low. There are tow possible targets for this delcine. The first is the 61.8% retracement of the 2020-2022 rally near 52.00. The fractal model suggests a deeper decline to a range near 50.00. With both of these targets in mind, Crude Oil may be in what is called an accumulation phase. Given the historic decline and nearby targets. crude offers a viable alternative to equities or bonds.
ZeroHedge observes, “The OPEC price war has made landfall in the US.
Following our report earlier that Saudi Arabia has declared a new price war on OPEC+ quota-busters such as Kazakhstan, and non OPEC+ members such as US shale producers, today after the close Diamondback Energy, the largest independent oil producer in the Permian Basin, made a historic pronouncement today when it said that production has likely peaked in America’s prolific shale fields (something we also mentioned earlier in the day) and will decline in the months and years ahead after crude prices plummeted.”