The Lord’s Prayer
Our Father, who art in heaven, hallowed be thy name. Thy Kingdom come, Thy Will be done, on earth as it is in heaven. Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us. And lead us not into temptation, but deliver us from evil. Amen.
3:34 pm
The Agricultural Index is acting like a runaway train, especially after breaking through the downtrend line in January. I had been suggesting accumulating shares as it has a long way to rally. However, the current probe higher may be due for a correction back down to the trendline near 375.00. Could the O.J. futures be an indication?:
ZeroHedge remarks, “Valentine’s Day has arrived, and near-record high cocoa prices mean consumers can expect to pay significantly more this year for a box of chocolates at the supermarket than last year. The price surge has been mainly driven by tightening global supplies, with cocoa inventories in New York and London sliding to new record lows. ”
3:06 pm
Gold made its Master Cycle high on Monday, February 11 at 2968.50. Today it crossed beneath the Cycle Top support at 2900.99, creating an aggressive sell signal. The Cycles Model suggests that the price of gold may decline through the end of March in the next Cycle iteration. Take appropriate action.
12:30 pm
SPX has made a possible reversal at a Cyclical Pivot Point. This is a very bearish setup, coming within a point of the January 24 high.
7:45 am
Good Morning!
SPX futures attempted to make a new all-time high in the overnight session, but fell short at 6127.40. It is currently testing 6100.00 as it pulls away for its Cycle high. Note that the Master Cycle has been revised to yesterday’s high at 6116.91 (cash market)as the potential Cycle high. Note that a reversal becomes evident beneath 6050.00 and the 50-day Moving Average lies at 5998.02. While the ending fractal looks complete, there is a small possibility of a final probe higher today. The sideways motion for the past three weeks have let the air out of the AI bubble. There is no one left to buy the narrative and liquidity is running out as investors are “asll in.”.
Today’s options chain shows Max Pain at 6080.00. Long gamma may begin above 6100.00 while short gamma resides beneath 6075.00.
Zerohedge reports, “Us equity futures are slightly lower with yields flat and the dollar lower as traders appear exhausted at the end of a rollercoaster week full of headlines on trade tariffs and rumors on Ukraine peace efforts, as well as a slew of earnings and further proof inflation isn’t going away. As of 8:00am ET, S&P futures were down 0.2%, a modest retreat from Thursday’s near-record close; Nasdaq futures were also lower as Palo Alto Networks fell 6.1% in premarket while Airbnb jumped after beating expectations. Mag 7 are mostly flat to slightly lower, with the exception of TSLA’s +1.6% gain pre-market (GOOGL -0.2%, AMZN little changed, AAPL -0.2%, MSFT -0.2%, META -0.3%, NVDA -0.1% and TSLA +1.6%). Luxury stocks were a bright spot in Europe as Hermès rallied to a record after its holiday-season sales surged. Meanwhile, the China rally continues as a broader index of Chinese stocks trading in Hong Kong closed at a three-year high, as the nation’s growing AI capabilities bolster investor optimism over the market’s outlook. Yields are 1-2bp lower while the USD extends its losses on hopes that Trump’s tariff approach poses less of an upside risk to inflation. Commodities are mixed: energy and ags are higher, base metals are lower. The House Budget Committee advanced a budget resolution yesterday, a major first step towards Trump’s legislative agenda. Today, key macro focus will be the latest Retail Sales, which consensus expects to decline 0.2% MoM but the control group to rise by 0.3% MoM.”
VIX futures are consolidating beneath resistance at 16.29-16.49. Once above resistance, we may see a steady rise in the VIX through the rest of February. The Cycles Model suggests a veritable explosion of activity in the first week of March.
The February 19 options chain shows Max pain at 17.50. Short gamma dominates between 15.00 and 17.00. Long gamma starts at 20.00 and is gaining conviction up to 60.00.
TNX may be finalizing the retracement to the 50-day Moving Average at 45.01 this morning. While trending strength may come back to TNX early next week, a reversal off the 50-day appears to be anticipated today. Should it overshoot the 50-day, the trendline at 44.00 may give support for the reversal. Yesterday’s 30-year bond auction was a disappointment as fewer buyers appeared. Note that the dealers must buy any treasury securities that are left unsold. As the size of the Treasury auctions increase, the dealers may be left “holding the bag” on more and more bills, notes and bonds. This will drain even more liquidity from the equities market.
ZeroHedge reports, “A stellar 3Y auction, followed by a mediocre 10Y, we conclude the refunding week’s coupon offerings with an even more disappointing 30Y sale, which saw $25 billion in ultra long-dated paper sell to muted market response.
The auction stopped at a high yield of 4.748%, down from 4.913% last month, but tailing the 4.736% When Issued by 1.2bps, a reversal to last month’s 0.7bps stop through and the fifth tailing 30Y auction in the past 8 months.”
USD futures are in decline for the next month, according to the Cycles Model. This may alter money flow from foreign sources as the currency differential may aggravate losses in equities.
As the USD declines, the Yen may rip higher, since it has crossed above mid-Cycle resistance at 65.57. This is another liquidity chokepoint that may affect equities over the next month.