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.
7:50 am
NDX futures declined to 18558.00 this morning, then a bounce after making nearly a 50% retracement of the decline in two days after a 47-day decline. Yesterday morning the Cycles Model labeled the day as a high velocity turn date. So it was. The NDX rallies 12.02% after the prior day decline of -9% in a rogue Wave B. Records like this have not been seen since October 2008. The Cycles Model suggests a rally to the week of April 21. Overhead resistance lies at 20000.00, a very round number with a 61.8% Fibonacci resistance nearby. This suggests a choppy finish of the retracement over the next 1-2 weeks.
SPX futures eased back to 5323.00 this morning after a 9.52% rally yesterday. The short squeeze rallied SPX up to the 1987 trendline (resistance), which provided support on the way down. The 1987 trendline also happens to be very near the 50% retracement level, which may cause a lot of choppiness over the next 1-2 weeks. The 61.8% Fibonacci retracement is above the trendline at 5863.70, which casts doubt on how much further the SPX may rise.
Today’s options chain shows Max Pain at 5450.00. Long gamma may begin above 5500.00 while short gmma has been cleared to non-existence by yesterday’s short squeeze.
ZeroHedge reports, “The record (notional) bounce-back in global equity markets, which pushed the S&P higher by nearly $5 trilllion in market cap after Trump delayed plans to implement higher reciprocal tariffs on dozens of trade partners, has started to fizzle a bit. S&P 500 futures are down 1.6% after Wall Street logged its best day since 2008 on Wednesday, while Nasdaq 100 contracts drop 1.9% as the market takes some profits and moves to assess Trump’s updates, following a global relief rally. Premarket Mag7 names are under pressure with much of the group down ~2%. Financials, Healthcare and Semis other notable sectors moving lower. Global markets soared in sympathy with the US rally yesterday: Asian equities posted their biggest jump in more than two years and European stocks staging their strongest rally since March 2020, however while the Stoxx 600 surged over 7% at the open it has since pared its advance to less than 5%, as banks and financial services, this session’s outperformers, trim gains. Treasuries reversed an earlier gain, with US 10-year yields first falling 5 bps to 4.28% before reversing and trading unchanged at 4.33%; there is a 30-year bond auction later today which will be closely watched. The mood shift is also evident in currency markets where haven demand has returned, pushing the Japanese yen and Swiss franc to the top of the G-10 leader board. Spot gold climbs $25 to $3,108/oz. The Bloomberg Dollar Index falls 0.6%. Oil prices decline, with WTI falling nearly 3% to $60.70 a barrel. Bitcoin gains fade as it trades lower around $81,000. The main event on today’s calendar is the March CPI which may or may not move markets.”
VIX futures bounced to 39.01 this morning as traders took upside profits in equities. Monday’s high in the VIX appears to be the master Cycle high on day 260. The decline may continue to the end of the month to complete the new Master Cycle.
TNX futures declined to 42.63 as it continues to retrace its rally with a possible target of the mid-Cycle support at 42.16. The Cycles Model suggests the retracement may be over in the next 24-36 hours. Next week may begin with another surge higher as highly leveraged trades unwind/implode.
ZeroHedge remarks, “While the media focuses on surface-level distractions, a deeper financial crisis is accelerating: the collapse of a $1 trillion+ leveraged trade in the U.S. Treasury market.
ITM Trading’s Taylor Kenney breaks down how hedge funds like Citadel and Millennium—leveraged up to 10:1—are being forced to unwind risky trades that once seemed safe. But as volatility spikes and liquidity vanishes, Treasuries are being dumped en masse, sending yields soaring and swap spreads collapsing.”
ZeroHedge (yesterday) reports, “Well, the 10Y auction is in the bag, and after yesterday’s very ugly 3Y, today’s sale was very solid, at least until one looks a bit deeper.
First, looking at the headline numbers, we find that the high yield jumped from 4.310% in March to 4.435% today, which is remarkable in itself considering the 10Y was 3.87% on Friday! Still, while the yield was clearly high (and could have been even higher had swap spreads not tightened ever so slightly), it stopped through the 4.465% When Issued by a whopping 3bps. This was tied for the 2nd biggest stop through on record, and the one previous time when we saw a 3bps stop through was in Feb 2023, just as the US banking crisis was raging.”
Bitcoin is consolidating beneath Intermediate resistance at 83331.00 this morning after yesterday’s 12% panic surge. A potential rally he mid-Cycle resistance may be forthcoming.
Gold futures rallied to a high of 3154.54 this morning. It has the hallmarks of a retracement rally which should be ending today. Standby for a decline beneath the Cycle Top at 3068.00 for a possible sell signal.
Crude oil may have completed a near-61.8% retracement of the rally out of the 2020 low. If so, be ready for a surge in oil prices going forward. If so, the Cycle Top at 78.89 may be a near-term target.