9:00 am
BKX continues to deteriorate beneath the Cycle Bottom resistance at 76.08. The Cycles Model continues to suggests a bottom may be in by mid-June. However, the stand-off on the debt ceiling may extend that period, as indicated by trending strength persisting beyond the Cycle due date.
ZeroHedge remarks, “After last week’s massive non-seasonally-adjusted deposit outflows (and shrinking Fed balance sheet), all eyes will be back on The Fed’s H.4.1. report this evening for signs that the regional banking crisis is accelerating even further (as PacWest’s statement and regional bank shares suggest).
The answer is not a good sign for the bulls as Money Market Funds saw $18.3 billion of INFLOWS, pushing the aggregate to a record high of $5.328 trillion. That is almost $120 billion of inflows in the last three weeks…”
7:30 am
Good Morning!
US Tech futures are higher this morning, to 13434.80. Today is day 269 of the Master Cycle. It appears to be in an Ending Diagonal throw-over with the Cycle Top at 13516.54 as a probable final resistance. Throw-overs are not breakouts, since they are usually done with thin volume, suggesting little or no follow-through.
Today’s options expiration shows Maximum Pain for options investors at 13075.00. Long gamma begins at 13100.00, while short gamma starts at 13050.00. The options market may be the tail that wags the dog, as long as long gamma persists.
QQQ, at 326.20, shows 324.00-325.00 to be hotly contested, with long gamma above and short gamma beneath that range.
ZeroHedge posits, ” The “what if” bull
One could argue that the two most important events / developments for the markets over the past few months have been:
1. Musk reducing Twitter workforce by 70% with the product still working….
2. AI. No comments needed.
Who have been the first early adopters / benefactors of this? Big Tech of course. They are actively reducing staff (well-needed, the organizations were becoming bloated) and there is much more to go. And Big Tech are leading in the AI race so far.
This has resulted in a massively bifurcated market where Big Tech is carrying the whole rally themselves.”
SPX futures rose to 4150.50 this morning, as the influence of the Nasdaq bleeds over to the blue chips. The retracement structure appears complete at 4154.28. A reversal appears imminent. Intermediate term support is at 4103.44. If broken, this may confirm the sell signal.
In today’s op-ex, the 4125.00 strike appears to be hotly contested, with long gamma above and short gamma especially strong at 4100.00 and below.
ZeroHedge reports, “US equity futures advanced to end the week as traders remained fixated on the path of monetary policy while assessing stronger than expected corporate earnings as the season nears its end. Contracts on the S&P 500 rose 0.3% at 8:00 a.m. ET while those on the Nasdaq 100 advanced 0.2%. Swiss luxury-goods maker Richemont soared 7.8% to a record on “spectacular sales growth”, fueling a broad rally across European luxury stocks. Risk-on sentiment pushed Treasury yields higher. The Bloomberg dollar index was poised for its biggest weekly gain since March while oil prices declined again, set for their fourth weekly loss. Meanwhile, gold is also on course to end the week lower. Iron ore futures are falling sharply for a second day, but still on track for a weekly gain.
VIX futures are sitting near yesterday’s low. The long-term trendline at 17.50 appears to be the line in the sand.
The May 17 (monthly) op-ex shows the 20.00 strike to be hotly contested. Short gamma reigns beneath it to 14.50. Long gamma rules above it to 90.00.
TNX rose toward the trendline at 34.50 this morning. Rising above it confirms the buy signal. The Cycles Model suggests rates may rise through early July.
ZeroHedge reports, “After a stellar 3Y auction, a solid 10Y moments ago we got the last refunding auction of the quarter when the treasury sold $21 billion in 30 year paper, and it did so in impressive fashion.
The high yield of 3.741% was just above last month’s 3.661%. It also stopped through the When Issued 3.756% by 1.5bps, the biggest stop through since January’s 2.4bps.
The Bid to Cover rose to 2.426, above April’s 2.359, above the six-auction average 2.346 and the highest since January’s 2.451.”
TheEpochTimes observes, “Senator Joe Manchin (D-W.Va.) said his fellow Democrat, President Joe Biden, has staked out a “hypocritical” position in recent debates over how to raise the U.S. debt limit.
Biden has repeatedly called for a so-called “clean bill” to raise the debt limit without any additional conditions on matters such as spending reforms. In an interview with CNN on Tuesday, Manchin criticized Biden’s position.
