June 28, 2024

10:40 am

SPX is rising to new all-time highs.  NDX is also at a new ATH.  The DJIA has not exceeded its May 20 high.  Most of the money flow for this market is coming from overseas.  There are two fractal calculations for maximum resistance near 5550.0.  However, the Cycles Model tells us that a turn may be made at any time over the next 8-9 market days.

RealInvestmentAdvice observes, “Financial advisors get a bad rap. Some deserve it; most don’t. The problem for the entire investment advisory and portfolio management community stems from the “career risk” they inevitably face. That “career risk” has been exacerbated over the last decade as massive monetary interventions and zero interest rates created outsized returns. A point we discussed last week in “A Permanent Shift Higher In Valuations.”

“The chart below shows the average annual inflation-adjusted total returns (dividends included) since 1928. I used the total return data from Aswath Damodaran, a Stern School of Business professor at New York University. The chart shows that from 1928 to 2021, the market returned 8.48% after inflation. However, notice that after the financial crisis in 2008, returns jumped by an average of four percentage points for the various periods.””


8:15 am  2 Chronicles 7:14

“If my people, which are called by my name, shall humble themselves, and pray, and seek my face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sins, and will heal their land.”

Good Morning!

SPX futures rose this morning to 5506.30.  It may be noted that on June 20, the futures rose to 5513.10, so this is not a new ATH in the futures.  Should the June 20 cash high at 5505.53 not be exceeded, we may see an 8-9-market – day decline to the Cycle bottom at 4172.77.   The alternate view is a new ATH may be made in the same time period, should the rally persist.    The DJIA and NDX futures are not making new highs, so there is no confirmation that the SPX may make new highs.  This is a confusing market as liquidity rotates to find a new home.  An open beneath 5490.00 suggests the decline may resume.

Today’s options chain shows Max Pain at 5475.00.  SPX may be in long gamma, above 5480.00.  Short gamma may begin at 5460.00.

ZeroHedge reports, “Futures are higher led by small caps with tech stocks also mostly higher, as markets start pricing in a Trump presidency following what even Bloomberg admitted was a “disastrous” debate performance by Biden which is making Democrats panic. As of 7:45am ET, S&P and Nasdaq 100 futures rose 0.4%, suggesting this week’s rally on Wall Street is set to continue, with both indexes on course for a third quarter of gains amid expectations that signs of more bad economic growth will give the Fed more room to ease policy this year. That said, not even a looming core PCE which will likely show continued easing in prices (May PCE est 0.0% MoM, down from 0.3%, 2.6% YoY, down from 2.7%) is having an impact on bond yields which are notably higher this morning as is the USD as markets take a long, hard look at what inflation will look like under Trump’s tariff-ridden regime (spoiler alert: higher). Commodities are mixed: oil and precious metals are higher; base metals are lower. Today’s macro focus will be the May PCE release to access the Goldilocks narrative. Survey expects a 0.1% MoM print vs. 0.2% prior; on YoY basis, survey sees the number dropping to 2.6% survey vs. 2.8% prior).”



VIX futures made a new corrective low at 11.87 this morning.  The Cycles Model shows the VIX is within 2 weeks of the end of the current Master Cycle.  A new low beneath the May 23 low at 11.52 may pinpoint the end of the Master Cycle.  The alternate view is a possible volatility outburst that may upend the current “calm” environment.

The July 3 options chain shows Max Pain ar 12.50.  Long gamma may begin at 13.00, but does not have a loot of conviction.


TNX futures have fallen to new low at 42.61 thus far and may continue toward the trendline or lower.  The Cycles Model calls for a possible week of further decline.  This may boost equites to a new all-time high.  Liquidity for Treasuries (UST) may be arriving from European and Japanese investors who are fleeing a meltdown in their currencies.  A sell-oof in US equities may exacerbate the flow.

ZeroHedge observes, “Following two very solid coupon auctions, when the US sold 2Y and 5Y paper earlier this week, moments ago the Treasury completed the week’s final coupon sale when it sold $44BN in 7Y paper in yet another very strong auction.

The high yield of 4.276% was almost 40bps below May’s 4.650% and also stopped through the When Issued 4.279% by 0.3bps. This was the 4th stop through for the tenor in the last 5 auctions.”


USD futures declined to 105.42 this morning as it may complete its correction to the June low.  Both the Euro and the Yen have made their Master Cycle lows on Wednesday.  The reversal of money flows back into those currencies may bring USD futures down temporarily while the other major currencies recover.



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