10:22 am
The GSCI Ag Index made a new 8-year high this morning, on day 265 of its Master Cycle. Should the Ag Index reverse from here, it may make a 50% retracement to the Head & Shoulders neckline over the next three weeks. However, supply and demand constraints may take it higher, stretching the Master Cycle even more.
ZeroHedge reports, “Chicago corn futures are up 3% Monday as supply concerns drive prices to an 8-year high.
“Corn is in the driver’s seat as there are supply worries as well as strong demand,” a Singapore-based feed grains trader told Reuters. “Corn is pulling prices of wheat and soybeans higher.”
Besides corn, wheat tagged a seven-year high, while soybeans are at eight-year highs. The entire agri-complex is on fire.”
8:05 am
Good Morning!
SPX futures traded again in a narrow, but higher range in the overnight session. It is positioned to rally as high as the Cycle Top resistance at 4240.00 in its final probe.
ZeroHedge reports, “For the second day in a row, U.S. equity futures are starting the day barely changed, up just 0.1% and at new all time highs, alongside Treasury yields as earnings reports added to positive sentiment regarding an economic recovery in the developed world despite some disappointment in the latest TSLA results. The S&P 500 and the Nasdaq closed at record levels on Monday, with the tech-heavy Nasdaq completing a full recovery from its 11% correction that began in February.
At 07:15 a.m. ET, Dow E-minis were up 12 points, or 0.04%, S&P 500 E-minis were up 4.5 points or 0.1% to 4,184, trimming earlier gains that pushed the Emini as high as 4,192.5, and Nasdaq 100 E-minis were up 20 points, or 0.14%.”
NDX futures rose as high as 14047.88 before easing down. It has yet to make a new all-time high. Should it reverse down before doing so, it would leave a glaring non-confirmation of the SPX high.
ZeroHedge reveals, “For the world’s bulge-bracket banks, the Archegos blowup is the gift that keeps on giving: Just when analysts thought that the busted family office’s prime brokers had disclosed all of their losses, UBS surprised them by revealing in its Q1 earnings report that it had booked a $774MM loss due to the fund’s implosion. Meanwhile, Japan’s Nomura revealed that its losses had climbed to $2.85 billion, though the losses straddled two fiscal years, with 245.7 billion yen (about $2.27 billion) booked in the year ending in March, and another 62 billion yen ($573.4MM) for the fiscal year that started in April. Like Morgan Stanley, UBS determined that its losses from Archegos weren’t significant enough to warrant an announcement ahead of a scheduled earnings release.
That $2.3 billion in red ink helped push Nomura to its worst quarterly loss since 2009.”
VIX futures are still hovering beneath the trendline at 18.20. It appears to have completed a 64.8% retracement of its initial rally from the Master Cycle low. It may now be primed to explode higher.
TNX continues its advance in a more volatile fashion. The Cycles Model shows a very strong surge higher through the end of May. The targeted value appears to be 19.71, although it may go higher.
ZeroHedge reports, “Following this morning’s disappointing 2Y Auction, moments ago the Treasury concluded the day’s second coupon sale, this time comprising of $61BN in 5Y paper, and amid expectations of a poor auction the final prints were actually not too bad.
The auction priced at a high yield of 0.849%, which was not only “on the screws” with the When Issued (i.e., on top of the 0.849% WI), but was 0.1bps below the 0.850% high yield from March.
Like in the 2Y auction 90 minutes ago, the Bid to Cover did drop, but not nearly as much sliding to 2.31 from 2.36, which was just below the 2.35 six auction average, but above the 2.24 hit in February.”
USD futures made an overnight high of 90.81 as it advances toward the 50-day Moving Average at 91.56. Yesterday’s low occurred on day 269 of the Master Cycle, so there is no reason to anticipate a further decline. It makes a buy signal above the 50-day.