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.
1″55 pm
SPX may have completed its initial bounce. If so, there is the possibility of a retest of today’s low. A decline through the 1987 trendline may signal a continuation of the decline while a bounce above it confirms the three-week reversal.
10:18 am
The Ag Index is emerging from its Master Cycle low last Friday. It is on an aggressive buy signal that may not be confirmed until it rises above the Intermediate resistance at 389.79. However, the bounce from the trendline and ,id-Cycle support at 370.93 confirms the reversal. This is one asset class that is on the rise for a long time.
9:55 am
BKX continues its decline that may last to mid-April. Liquidity may be more influenced by the 10–year Treasury yields than the stock market itself.
7:45 am
Good Morning!
NDX futures have declined to a morning low of 18963.30 thus far as domestic indices are at day 258 of the Master Cycle. The decline may reach its intended target near 18407.66 in the next 24-48 hours, followed by a tradable 3-week bounce back to the mid-Cycle resistance at 20366.38. This has been the worst first quarter and worst month of March for NDX since 2022.
SPX futures have declined to 5507.90 thus far this morning. Should SPX decline beneath its 1987 trendline, a 3-week bounce may elevate it back to the mid-Cycle resistance at 20366.72, with a future bearish path to follow. However, should the SPX bounce at or above the 1987 trendline near 5480.00, the 3-week bounce may go considerably higher.
Today’s options chain shows Max Pain at 5595.00. Short gamma begins beneath 5575.00 and extends to 5475.00. SPX is currently beneath a massive wall of puts exceeding 45,000 contracts at 5565.00. No catalyst is needed to push the SPX lower.
ZeroHedge reports, “US equity futures and global markets tumbled on the last day of the worst quarter for US stocks in 23 years as the April 2 “liberation day” comes into sharp view. As of 8:00a, S&P futures are down 1.1% after Trump dented hopes he would limit the initial scope of levies set to be unveiled on Wednesday, telling reporters aboard Air Force One he plans to start with “all countries” leading to Goldman promptly slashing its S&P price target for the second time in weeks, now seeing the index dropping to 5300 in 3 months; Nasdaq futures tumbled 1.6% driven by heavy selling of the Mag 7 stocks (NVDA -3.2% and TSLA -4.1%). It wasn’t just the US: Europe’s Stoxx 600 slid 1.2% and Asian stocks suffered sharp losses, with the Japan’s Nikkei 225 index losing 4% and Taiwan’s stock index falling into a correction. Bond yields are 4-7bps lower; the USD was lower at first but has since rebounded . Commodities rise across the board: gold trading up 1.1% to a new record high of $3120, with base metals mostly higher, and Brent above $74. This week, all eyes are on April 1st (all studies related to trade policy will be completed) and April 2nd (reciprocal tariff announcement, sectorial tariffs such as pharma, semis and commodities, the resumption of 25% tariffs on USMCA-compliant goods). We will also receive ISMs and NFP this week.”
DJIA futures have declined to a morning low at 41241.50 thus far. I am showing a weekly chart, since the DJIA bullish impulse may not be complete. The 1987 trendline is not shown on the daily chart since the DJIA is still a considerable distance beneath it. This chart shows that the bullish impulse may not be complete until the DJIA reaches 48000.00. It is possible that the next three weeks may elevate the Industrials above the recent highs with 48000.00 possible by the end of April.
Why is the bullish outcome for the DJIA possible? Aside from having an incomplete fractal, the DJIA is considered the safest haven in the world at this time. War may be breaking out in Europe and the Japanese economy is failing. Investors in those two regions may choose to flee to the safest investment possible. While US treasuries may attract some cash, the DJIA offers the best long-term safety net. As the war drums in Europe beat louder, investors there may be fleeing the crumbling political and economic train wreck to a place of relative safety in the US.
VIX futures rose to 22.42 this morning. The odds of making a new high are substantial. However, it may be end end of the Master Cycle as well. Trade it if you wish, but have your exit close at hand.
The April 2options chain shows Max Pain at 19.00. Short gamma resides between 15.00 and 18.00. Long gamma may begin above 20.000 and extends to 32.00. Options investors have been slow to hedge until now. Unfortunately new hedges may be trapped by a sudden reversal.
TNX has continued its decline beneath the mid-Cycle support at 42.16. However, the current Master cycle is on day 256, suggesting a reversal may be imminent. So, although there is a sell signal, it is not likely to be tradable. What is to follow, ay be imminently tradable as TNX may be due for a two-month rally following the potential reversal.
Bitcoin continues its consolidation with two more weeks left. It is possible that the consolidation may end in a high near Intermediate resistance currently at 93583.34.
Gold futures rose to a morning high at 3160.14 while the CME trades closer to 3100. A possible reversal may be made over the next 2-3 days. Once the reversal is made, gold may be traded lower over the next month. A likely target may be near the lower trendline at 2800.00. Should it remain above the trendline at the end of April, gold may actually go higher. However, once beneath the trendline, the futures become more bearish.