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.
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Good Morning!
SPX futures rose to 6128.10, 8 ticks beneath the all-time high of 6128.18 made 24 days ago. The cash market topped out at 6127.47 thus far, making today’s action a truncated rally. Today is day 270 of the already extended Master Cycle. The Cycles Model showed high trending strength over the weekend, but may not have been enough to put it over the top. A rise in volatility often accompanies trending strength, which suggests a possible reversal .
ZeroHedge reports, “Even though US cash markets are closed today for the President’s Day holiday, US equity futures are open and are trading about 0.2% higher amid muted volumes.
The action, as noted earlier, is in Europe where bonds fell and shares of defense companies rallied on the likelihood of greater military spending, which could force governments to step up borrowing in the coming years. ”
VIX futures rallied to 15.57 this morning, signaling a possible reversal. The 50-day Moving Average is at 16.32 and the mid-Cycle support/;resistance is at 16.51. Once above those resistances, the VIX has clear sailing to the week of March 17.
RealInvestmentAdvice comments, “Market Shakes Off Inflation Data
I am back from traveling, and we have a good bit to catch up on since our last report. If you missed it, I provided an update on Tuesday, updating all the weekly technical and statistical data we produce. Most noteworthy in that report was the sharp increase in money flows into the market despite the tariff announcement by the Trump administration and the latest inflation reports.
On Thursday, the market broke out of the bullish consolidation over the last few weeks, successfully retesting and holding support at the 50-DMA. Notably, the bullish trend remains intact, and retail investors continue to pour money into the market, with money flows reaching typical peak levels. With the market elevated, downside risk over the next few weeks will likely be contained to recent January lows. What would cause such a correction is unknown, but if money flows begin to reverse, such will likely provide the evidence needed to rebalance risks accordingly.”
TNX is consolidating around the 50-day Moving Average near 45.00 this morning. This may be in preparation for a reversal in the next 24 hours. Trending strength is coming back in a big way, contrary to what most would like to believe.
High Yield Corporate bonds have been on an uptrend since October 2022. Corporate bonds are sensitive to economic conditions, which are now changing. Yields may rise as conditions deteriorate. The Cycles Model indicates an imminent revesal.