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.
10:59 am
BKX may have made its Master Cycle high on Wednesday, on day 253. Should it not make a new high, the Cycles Model infers a decline that may last to mid-May. A decline beneath the neckline at 101.00 may induce a decline to 60.00. Be careful. Things may get nasty in the next week.
7:45 am
Good Morning!
NDX futures rose to a weekend high of 19086.00. The weekly chart shows that the NDX has not yet challenged the long-term uptrend line near 15200.00. This has sparked a debate whether the NDX is in a bear market or not. Considering the steepness of the rally since October 2022, gains have been forfeited, but the long-term uptrend is still intact. That may soon change, as another Cyclical reversal may be due next week. The challenge for the NDX is whether it may rally above a triple resistance directly overhead. The 30-month trendline (not shown) lies at 20000.00. The 10-week (50-day) resistance lies at 20113.36 and the 61.8% Fibonacci retracement lies at 20036.00. The challenge is to overcome these resistances to overcome a possible bear market reversal. Investors are fatigued after last week’s panic-induced moves in both directions. This week promises to be calmer, but there is work to do in order to re-establish the long-term uptrend.
SPX futures are higher, having attained a weekend high of 5447.10. It is nearing the long-term (1987) trendline near 5500.00. The 50% Fibonacci retracement value is at 4985.00, while the Intermediate resistance is at 5617.62 and falling fast. Finally, the Cycles Model suggests the SPX may rise to the mid-Cycle resistance at 5770..00. This may portend a choppy week ahead for the SPX.
Today’s options chain shows Max Pain at 5250.00. Long gamma may begin above 5300.00 whils short gamma lies beneath 5200.00.
ZeroHedge reports, “US equity futures are higher, part of a global risk-on rally, after President Trump paused import duties on a range of consumer electronics over the weekend (even as he clarified on several occasions the pause is only temporary). As of 8:00am, S&P 500 futures are up 1.5% while Nasdaq 100 contracts climb 1.9% with Mag7 names are all higher led by AAPL (+4.9%); Semis and Cyclicals outperforming, too; Goldman Sachs was 2.7% higher after its first-quarter earnings. The global risk on rally has meant a broadly positive European and Asian session as well. That said, volatility remains front and center among asset classes, with the VIX holding around 33 and similar gauges for bond and currency swings also staying elevated. The dollar fell for a fifth day as Trump warned that a specific levy for electronics will be announced later; DXY remains at the 100 level, aiding international indices in outperforming the S&P. US bonds retraced some of last week’s losses, pushing 10-year yields down to 4.43% in a bull-steepening move. Commodities are mixed with Energy/Base Metals higher, precious lower, and Ags mixed. Trump is set to give more color on tariffs later today but markets like the delayed implementation at a time when positioning is cleaner. Macro data this week is focused on Retail Sales and Housing data, plus today’s NY Fed Inflation Expectations.”
VIX futures made a new low at 32.22 this morning as it drifts lower. A possible target for this decline may be the Cycle Top support near 30.45. While the VIX did not exceed the August 5, 2024 high, it remains more elevated after Monday’s episode. As of Friday’s close, it hovered about 18 points above its mid-Cycle support at 18.96. This suggests investors’ expectations may have changed favoring a willingness to hedge against future downdrafts.
The April 16 options chain shows Max Pain at 21.00. Short gamma resides between 15.00 and 20.00. Long gamma may begin at 22.00 and extend to 75.00.
TNX has turned down this morning, with futures reaching 44.20 thus far. There are two possible retracement values to consider. The first is the trendline and 50-day Moving Average at 43.46. The more likely retracement may be the mid-Cycle support and 50% retracement value near 42.18. This may have a temporary calming effect on equities. While the PBOC is doing everything in its power to prop up the Chinese equities markets, the Fed refuses to consider doing the same for the US markets.
USD futures have bounced out of Friday’s low and have risen above the Cycle Bottom support/resistance at 99.47. This may have triggered an aggressive buy signal. While the sudden decline since April 2 may be attributed to the announced Trump tariffs, the reaction of our trading partners may produce a more realistic view of the effects of the tariffs on the US economy and an end in the 30-month downdraft in the US Dollar. .
Bitcoin may have made its Master Cycle high on Sunday and is hovering above the 50-day Moving Average at 84455.00 where a sell signal may be made. Further confirmation of the sell lies beneath the Intermediate support at 83531.15. Should Bitcoin fall beneath these levels, a decline may ensue through the middle of June.
Gold futures have pulled back to 3209.00 this morning after making a potential Master Cycle high on Friday. The top trendline of its 1 year trading channel lies at 3200.00. A decline beneath it may offer an aggressive sell signal. The Cycles Model suggests a decline to follow until the week of May 5.