The Dow Jones Industrials Exceeded 35000.00 and may briefly touch the Fibonacci 3.25 X Wave  at 35152.00 today. It is also up against the 1987 trendline that has defined tops and bottoms for the past 33.54 years. The trendline may trump Fibonacci, so don’t expect a perfect target acquisition.
NDX has declined beneath the mid-Cycle support at 13599.56, giving a potential sell signal. It is likely that resistance will be retested before proceeding further down. The NDX Hi-Lo Index is at 119.00, not confirming the sell signal, while the VIX (VXN) are alsl hovering near their lows. I would be very careful with this move until it declines beneath the 50-day Moving Average at 13351.35.
ZeroHedge warns, “After a relatively calm overnight session, all hell broke loose at the US cash open with The Dow (new record high) bid while Big-Tech and Small Caps puked hard…
While the S&P is more neutral, Nomura’s Charlie McElligott’s options in both “Secular Growth” QQQ and “Cyclical Value” IWM implying Dealers remaining incrementally “SHORT Gamma vs spot” (QQQ “gamma neutral” line flips up at 335.34, IWM “gamma neutral” line flips up at 226.50), thus at current levels, both are susceptible to “accelerant” –type moves in both directions…”
NDX futures made a low of 13639.88 thus far, declining toward the mid-Cycle support at 13592.59. Should it remain above that support, there may be an outside chance of a panic rally to a high of 14450.00. Beneath that support reinforces the sell signal.
The current Master Cycle ends during options week. Both the NDX and SPX a possible low on Wednesday of options week. However, that may become a high, should the other indices continue to make new highs. A panic decline will settle the issue.
ZeroHedge observes, “Earlier today, Morgan Stanley’s chief equity strategist Michael Wilson looked at what was likely the highlight of Q1 earnings season, pointing out that “the vaunted FAANMG stocks sold off on terrific 1Q earnings results after an outsized run into the event. This was… a reminder that stocks often peak on good news.”
Not to make a too fine point out of it, suddenly everyone is focusing on the performance of the FAAMG stocks which, after soaring for much of 2020 when they returned 56% and accounted for 7% of the 18% S&P 500 return last year, have gone nowhere in recent months prompting concerns that it’s all downhill from here.
Not surprisingly, FAAMGs were also the topic of the latest weekly note from Goldman’s chief equity strategist David Kostin, who writes that confronted with the prospect of decelerating US economic activity, the bank’s clients are suddenly freaking out about a breakdown in the 5 Generals, and are “asking about the potential for a transition in market leadership” even as “many investors have expressed the view that economic deceleration should support the outperformance of the largest “Big Tech” stocks in the market”, a topic which Goldman analyzed recently and which view the bank supports.”
After making a new high at 4237.88, SPX futures have settled down to a nearly flat regimen. However, it appears to be forming a Broadening Wedge which may still be incomplete. Adding to the mix is the Industrials, still making new all-time highs in the futures.
ZeroHedge reports, “S&P futures started the weak flat with Nasdaq futures falling offset by surging commodity stocks as a new record in copper and iron ore prices stoked concern about whether inflation will derail a growth rebound in the world’s largest economy and spoil a record stock rally. Metal producers were among the biggest gainers in premarket trading, with Freeport-McMoRan, Cleveland-Cliffs and United States Steel all up at least 3%.
At 715 am ET, Dow e-minis were up 109 points, or 0.31%, S&P 500 e-minis were up 3.25 points, or 0.08%, and Nasdaq 100 e-minis were down 35.5 points, or 0.26%. The tech-heavy index has been whipsawed by the prospect of inflation which threatens longer-term profit expectations typical of the industry A downgrade by Citi of Internet stocks such as GOOGL did not help. Treasury yields steadied as traders brace for a busy week of auctions.”
VIX futures have firmed up, but still beneath the trendline near 18.00. The VIX has made an 8% retracement of the rally from its Master Cycle low. Should it be able to gain traction above the bottom trendline, it may see a Master Cycle high by late May or early June.
USD futures have made a new low at 90.10 this morning. USD is in the latter part of the next Master Cycle, due to bottom out during options expiration.
TNX has bounced off Friday’s Master Cycle low after bottoming on day 274. The new Master Cycle appears to project a high in early June. I see this as one of the disrupters that will affect the market