We may have seen the Wave 2 high in stocks at 10:00 am as recent good news could not “pop” the index to new highs. Today is day 258 in the Master Cycle, so be on the alert to go short. A reasonable level may be the short-term support at 4360.00, as short gamma begins at 4350.00.
ZeroHedge observes, “Reuters reports that Ukrainian negotiators have said the two sides have reached an understanding on a joint provision allowing humanitarian corridors for evacuating civilians.
The same negotiator reportedly said that the agreement involved a temporary ceasefire during evacuations.
A Russian negotiator was quotes as saying this is “substantial progress,” and Tass reports that a 3rd round of talks will take place in coming days.
The reaction was immediate as we suspect the algos only read the first few words of the headline…
We further suspect the algos are making a little too much of this – especially given Putin’s remarks just minutes before about “de-nazifying the nation.”
GKX is trending higher, but may see an end of its current Master Cycle in the next week. A probable target may be 570.00, although it could streak to 600.00 under critical circumstances.
Those of you who read my 4:40 pm post yesterday will notice that the NDX does not have an expected Master Cycle high in the next two days, while the SPX does. At the same time, the NDX had a Master Cycle low in early January, while the SPX was just coming off its high. Normally, the two indices go hand-in-hand, but at critical points, they diverge. This would be considered a half-Cycle high in the NDX. It’s target may only be Intermediate-term resistance at 14663.83, 2,000 points below the 200-day Moving Average. At this rate of decline, we may not see a bottom in stocks until early June, which makes this a decline for the record books, since the average bear market lasts only two months.
NDX futures are flat this morning.
ZeroHedge observes, “For what may be the most vivid example of how central planning has turned the market into one giant (and so far successful) experiment in Pavlovian conditioning, look no further than the following chart from Bank of America which shows that during the current 10% correction which started in early January and continues to this date, Bank of America’s ultra high net worth, or “private” clients, have allocated the most dip buying capital on record.
And last week was no different: according to BofA quant Jill Carey Hall, during last week’s market rollercoaster, where despite the break out of the Russia-Ukraine conflict the index ultimately closed +0.8%, the bank’s clients returned to buying US equities ($4.6B) after selling the prior week.”
SPX futures are flat beneath 4400.00 as the market prepares for another options day on Friday. Friday options turn positive above 4400.00, so it appears that dealers are in a sweet spot at or near Max Pain (for options investors, that is). While both call and put options are sparse above 4400, gamma turns long at 4500.00. Short gamma begins at 4350.00.
The Cycles Model calls for a Master Cycle high in the next two days. The target may be near the 200-day Moving Average at 4463.83.
ZeroHedge reports, “US stock index futures were flat on Thursday as investors assessed the impact of a surge in commodity prices on inflation and economic growth while eyeing news that a Ukraine delegation was headed to talks with Russia offering some hope of a ceasefire as the war in Ukraine enters its second week. Contracts on the Nasdaq 100 were down 0.2% by 7:15 a.m. in New York, after the underlying technology-heavy index rallied Wednesday to its highest level in two weeks. S&P 500 futures were flat and Dow futures declined 0.1%.
VIX futures are at the morning low at 30.32. While VIX appears weak this morning, support lies at the Cycle Top at 29.63. The Cycles Model suggests that the next Master Cycle high may be during the week of March 14 where the Head & Shoulder target may be met.
In tomorrow’s options, expiring VIX calls have predominance at 30.00 and above, with long gamma at 35.00. VIX calls become a runaway train above 35.00.
TNX continues its climb higher. UST shorts are still licking their wounds, but may soon notice the declining share values. The next Master Cycle (high) ends in the third week of April, so this rally may have legs. Trending strength comes back to TNX with a vengeance on Monday so bond investors should have made their positions by then.
USD futures are challenging the Cycle Top resistance at 97.41 and appear to have broken out above it this morning. The current Master Cycle may continue its rally through the week of March 21. 98.30 is the nominal target for this Master Cycle. However, it could just as easily go to 100.00.
ZeroHedge comments, “Over the weekend, the world gasped in shock when Western powers announced that the nuclear option would be used against Russia in retaliation for its invasion of Ukraine – sanctions against the country’s central bank and targeted expulsions of key banks from SWIFT, a move which has effectively locked Russia out of the western financial system and left its vast oil export industry – a key lifeline for the Putin regime – in limbo. But the real reason for the shock is that this was the first time the global reserve currency was weaponized against a G20 economy, setting a clear precedent for how the west would and could respond to any other nation that followed in Russia’s footsteps (something which China is clearly contemplating vis-a-vis Taiwan, and is carefully studying just how the west responds to Moscow),
As a result, and following this week’s dramatic freeze of the Russian central bank overseas assets, has prompted some to question just why countries build foreign currency reserves at all and, more broadly, whether the unprecedented western response to Russia hasn’t jeopardized the dollar’s reserve status.”
WTI futures consolidated this morning, declining to 106.51 as it regroups for its next probe higher. The Cycles Model implies a continued uptrend to the week of March 21. A possible target for this rally appears to be as high as 137.00. Further probes higher may not have the same strength as the most recent week.
ZeroHedge reports, “(Update 9:05am ET) – Not so fast with that rumor. Moments after oil tumbled as speculation of an imminent Iran deal spread, Reuters and Bloomberg blasted headlines suggesting that the IAEA remains unhappy with Iran, which continues to grow its stock of enriched uranium, and remains in breach of many key limits set by the 2015 nuclear deal.
- IRAN RAISES STOCK OF HIGHLY-ENRICHED URANIUM BY 83%: IAEA
- IRAN HAS CONTINUED RESTRICTING IAEA ACCESS TO DATA
- IRAN CONTINUES TO BREACH MANY KEY LIMITS SET BY 2015 NUCLEAR DEAL, INCLUDING URANIUM ENRICHMENT LEVEL AND ENRICHED URANIUM STOCK -QUARTERLY U.N. ATOMIC WATCHDOG REPORT
- IRAN’S STOCK OF ENRICHED URANIUM IS ESTIMATED TO HAVE GROWN BY 707.4 KG SINCE LAST QUARTERLY REPORT TO 3197.1 KG -IAEA REPORT SEEN BY REUTERS
- IRAN’S STOCK OF ENRICHED URANIUM INCLUDES AN ESTIMATED 33.2 KG OF URANIUM IN URANIUM HEXAFLUORIDE (UF6) FORM ENRICHED TO UP TO 60% PURITY, NEAR WEAPONS-GRADE -IAEA REPORT
- IRAN’S STOCKPILE INCLUDES AN ESTIMATED 182.1 KG OF URANIUM IN UF6 FORM ENRICHED TO UP TO 20% PURITY, PLUS 36.5 KG OF URANIUM ENRICHED TO UP TO 20% IN OTHER FORMS -IAEA REPORT
So don’t hold your breath for an immediate Nuclear deal, especially since Iran is already selling most of its product to China.”