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.
2:25 pm
The Banking Index hit its December low and may have formed a small Head & Shoulders formation. A breakdown through the neckine may produce a decline to the September low. The formation is at the right place and the right time, so we may follow it down to its conclusion.
12:17 pm
The Ag Index has bounced from its mid-Cycle support at 370.45 with precision and had risen back above its trendline near 373.00. This has given a possible buy signal for the Ag Index. A rally above its most recent high produces a target over 500.00. This may be a very welcome contrast to the goings-on in stocks.
11:52 am
SPX has declined to the 200-day Moving Average (a make-or-break level for some traders) at 5725.86, then bounced. However, there is another resistance near 5775.00 that may stop the bounce. The results is a possible resumption of the decline beneath the 200-day. The CTA sell signal is at 5887.00, so a possible $24 billion of stocks may be sold this week by the CTAs alone. Many trading desks are turning “tactically bearish” today.
2:30 pm
The bounce went well above the technical resistance, possibly trying to escape short gamma beneath 5800.00. It may be possible that the powers-that-be may be trying to convince the CTAs not hold off on the sales.
8:15 am
Good Morning! I have been keeping an eye on the Weather, since my destination this week is near an area expecting 10-20 inches of snow tomorrow. It now appears that the storm may have passed by Thursday, allowing me to leave on Thursday instead of Wednesday. All is subject to change.
SPX futures are testing 5800.00 this morning. There is little to stop it there, so the next support may be the mid-Cycle support at 5758.46, where a bounce is possible. Beneath that, supports may be found at round number intervals, such as 5600 and 5500.00. A significant bounce may be found at the 1987 trendline near 5400.00, possibly in the next week. The decline may gain intensity through March 21, but may not be over until the end of the month.
Today’s options chain shows Max Pain at 5900.00. Long gamma may begin above 5905.00 while short gamma intensifies beneath 5800.00. It appears that there may be a bounce with the dealers attempting to achieve 5800.00 at the close.
ZeroHedge reports, “Futures are lower, tracking European and Asian markets, with the dollar plunging on mounting recession fears, as the Trump trade war officially started at midnight, although according to JPMorgan it could be even worse and the “downward reaction is muted given the significant, expected impact on the economy and earnings expectations.” At the same time, Canada, China, and Mexico are rolling out their retaliatory measures. As of 8:00am ET, S&P futures are down 0.5%, and near session lows, while Nasdaq futures drop 0.6%, with Mag7 names sliding premarket and NVDA tumbling another 2.4% after plunging 8.7% on Monday. Investors will also be waiting to see what Trump says in his State of the Union speech tonight (some see it as a final hope for an off-ramp). Bond yields are mixed as the curve twists steeper and USD plunges amid rising fears the tariffs will accelerate a recession. Commodities are weaker with precious outperforming while energy stocks underperform as oil prices fall further after OPEC+ announced plans to revive halted production. WTI declines 0.8% to $67.80 a barrel, the lowest since December. There are no major macro data releases today and the Fed’s Williams speaks ~2.20pm EST; Trump’s State of the Union address is at 9:00pm ET.”
VIX Index rose to 24.69 this morning as investors sought hedges against the decline in stocks. There may be a burst in trending strength throughout the week as the “fear index” gets more attention. VIX is universally recognized in a positive trend above 25.00, so the rally may become more energized this week.
Bitcoin slipped beneath the mid-Cycle support/;resistance at 84347.22 this morning, reinforcing the sell signal. Bitcoin may be in the final week of its decline in the current Master Cycle. We may expect a bounce during the week of March 10. A lot may happen in the next week or so, since Bitcoin is a highly leveraged trading vehicle. The “Trump Bump” may blow up.
TNX futures declined to 41.28 this morning, in line with the December low at 41.26. It may be due for a mid-Cycle reversal. The current Master Cycle appears to run to the end of March. However, an inversion is not out of the question, as a price level may have been met.