1:55 pm
BKX is testing round number support at 100.00. The Cycles Model doesn’t show any fireworks until the end of June, when quarterly reports may be available. However, the decline has begun and BKX is definitely on a sell signal. Expect to see small bank failures begin soon. Larger bank failures may await their quarterly statements.
8:00 am Are you praying for our country?
SPX futures have declined to 4341.40 thus far. Supports lie at 5302.31, a short-term support that signals an aggressive sell. Intermediate support lies at 5223.73 where the sell signal may be confirmed. The 100-day Moving Average and Diagonal trendline lie at 5119.76, releasing the SPX from its uptrend. Longs are very complacent.
Today’s options chain shows Maximum Investor Pain at 5355.00. Long gamma may begin at 5375.00 while short gamma starts at 5340.00. The dealers do their utmost to keep SPX range-bound. That is, until the range is broken.
ZeroHedge reports, “US equity futures are lower with small-caps lagging, while Treasuries and the dollar rose as traders braced for a landmark day tomorrow that sees the release of both CPI data in the morning and then the Fed’s latest decision at 2pm ET. The crowded schedule sets up a crucial 36 hours for risk assets, including Bitcoin, which is currently getting hammered despite billions in ETF purchases in recent weeks, and is moving in the opposite direction to Treasury yields to an unusual degree. As of 7:50am, S&P futures were down 0.3%, near session lows while Nasdaq futures dropped 0.4%; both underlying indexes closed at record highs on Monday.”
VIX futures remain range-bound as the FOMC begins its June consultation. A summary of economic projections may be on the table this month. Friday’s jump in the TNX may have a dampening effect on rate cut projections.
USD futures continue their consolidation. Friday’s surge out of the Master Cycle low signaled that easing may be over. The Cycles Model suggests another week of strong gains before the USD takes a breather. A lot can happen in that time.
TNX pulled back to 44.30 this morning. There is the possibility of a corrective move to the mid-Cycle support at 43.68 in the very near term. However, it is noteworthy that the $39 billion 10-year note auction is being held today in addition to $106 billion in T-bills.
Zerohedge observes, “In a week where all attention will be on the CPI and Fed, clearly how bonds trade will be extremely important, so the reaction to today’s 3Y auction was closely watched. And it was not pretty.
When the Treasury sold $58 billion in 3Y paper for sale, the market reaction was not pretty and for good reason: the demand sucked. Stopping at a high yield of 4.659%, up from 4.605% in May and the highest since November’s 4.701%, the auction tailed the When Issued 4.648% by 1.1bps, the first tail since April.
The bid to cover slumped to 2.433 from 2.632, the lowest since December ’23, and well below the six-auction average of 2.567.”
Gold futures rose to 2337.15 this morning, possibly to test the 50-day Moving Average at 2348.31. The Cycles Model suggests a continuation of the decline once the test is completed. The decline may last to mid-July. The nest clear support is the mid-Cycle support line at 2113.27. While gold may be a store of value, it is also subject to variations in liquidity, which may take precedence.
ZeroHedge opines, “There is much legitimate (as well as dramatic) talk about the failing US, its debased currency and its identity-fractured/inflation-taxed middle-class which has been increasingly described more aptly as the working poor.
The End, or Just Change?
But is America coming to an end? Will the USD lose its world reserve currency status? Will the greenback disappear? Will gold or BTC save us from all that is breaking before our media-clouded eyes and increasingly centralized state?
Nope.
America is slipping, but not ending.
The USD is being repriced not replaced.”
Crude oil futures rose to a morning high at 78.17 before easing back. Intermediate resistance is at 78.71, while the mid-Cycle resistance is at 79.24. Today is day 257 in the Master Cycle, giving a couple of days to resolve whether (whichever) resistance may be met. Once complete, WTIC may resume its decline to the end of July. The Head & Shoulders formation warns us that it could be a steep decline.
OilPrice.com reports, “Russia’s budget revenues from oil and gas soared by 73.5% in January-May of 2024 compared to the first five months of 2023, according to data from Russia’s finance ministry released on Monday.
Between January and May 2024, the revenues for the Russian federal budget from oil and gas hit $55.7 billion (4.95 trillion Russian rubles), per the data reported by Russian news agency TASS.
“In line with parameters of the socioeconomic outlook, a steady surplus of oil and gas revenues above their base level is also expected in months to come,” TASS quoted a statement from the ministry as saying.”