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.
10:56 am
The Ag Index is pulling back from the 50-day Moving Average, offering investors more opportunity to “buy the dip.” The current Master Cycle may extend through mid-June. Once it returns above the 50-day the next visible resistance may be the Cycle Top at 408.76.
ZeroHedge observes, “America’s declining cattle herd is nothing short of alarming, and some ranchers call it a “national security threat” to the nation’s food supply chain. This continues to be a major theme fueling record-high cattle prices on the Chicago Mercantile Exchange and beef prices at the local supermarket. Elevated interest rates and soaring input costs under the Biden-Harris regime years have made it increasingly difficult to maintain or rebuild herds—challenges that are expected to persist early in President Trump’s second term.”
10:27 am
BKX has resumed its decline toward the neckline of the Head & Shoulders formation at 99.68. Liquidity is vanishing fast from the markets (see below). The Cycles Model suggests the decline may last to mid-May.
The Japanese Yen continues its upward probe above the Cycle Top resistance at 70.70, possibly testing the September 16 high at 71.55. Today may be the last day of the current Master Cycle, suggesting a pullback may be due shortly. However, there is another reversal due at the end of April that may propel the Yen to new highs later in May. The Yen carry is endangering the low interest loans made at .1%. The twist is that the payback may have risen as much as 13%, leaving the yen carry debtors in a possible default.
7:35 am
Good Morning!
NDX futures have declined to 17968.60 this morning, declining beneath the Cycle Bottom support at 18018.68 and confirming the sell signal. The next probable support level is the April low at 16542.20. The current Master Cycle may decline to mid-June, per the Cycles Model. Last week’s rally which ended on Monday stopped short of its usual parameters involving a retest of the trendline and 50-day Moving Average at 20082.00. This truncation does not bode well for the the health of the NDX going forward. The race to build a new AI model is burning a hole in the Mega cap corporate cash flow which may disappoint investors. Critical support lies at the 1987 trendline at 15200.00.
SPX futures have declined to a morning low at 5209.80, beneath the Cycle Bottom support at 5264.96. This confirms the sell signal. The Cycles Model suggests 6 weeks of decline may be ahead. SPX turned down last week without challenging the 1987 trendline, a sign of investor exhaustion. Critical support lies at the current April 7 low at 4835.00. Should SPX find support there, there may be an outside opportunity for the SPX to rally to new highs. We may see the SPX struggle to maintain that support this week. However, there are factors that may dictate a continued decline
Tooday’s options chain shows Max Pain at 5300.00. Long gamma may begin above 5350.00 while short gamma strengthened beneath 5250.00.
ZeroHedge reports, “With most global markets still closed for Easter holiday, US equity futures start the week sharply lower while the dollar and Treasuries plunge (10s and 30s are 8bp and 10bps higher as the yield curve twists steeper) as traders reacted to the possibility that Trump will try to remove Powell. As of 8:00am ET, S&P futures are down 1.3% and Nasdaq futures slide 1.5% with Mag7 names under pressure with INTC/NFLX among the bright spots in TMT. European stock markets were largely still shut for a public holiday. The dollar is set up to have its worst day in 2 weeks, plunging to a 15 month low, and sending precious metals soaring: gold was above $3400 at last check. Energy is weaker, Ags/base metals are higher. There is also trouble in trade deal land with Japan pushing back on US demands for its trade deal, while China warns trading partners against mistreatment in any deal made with the US. It’s a quiet day with just the Leading index on today’s calendar (10am); Fed’s Goolsbee speaks at 8:30am.”
VIX futures rose to a morning high at 32.89 above the Cycle Top at 31.24. That action reconfirms the buy signal. That leaves the August 5 high at 665.73 as the next resistance to the rally. The Cycles Model indicates a possible new high in about two weeks.
The April 23 options chain shows Max Pain at 26.00. Short gamma may begin beneath 25.00 while long gamma strengthens above 30.00.
TNX futures rose to 44.10 over the weekend, while the newly-opened cash market shows a high of 44.01. It has risen from a low on April 16 at 42.75, surpassing the 50-day Moving Average at 43.28 and creating a buy signal for yields. The Cycles Model calls for a 6-week rally that may exceed the Cycle Top resistance at 47.99.
USD futures declined to a morning low at 97.68 and may have reached the Master Cycle low on day 259 within target parameters of 96.00-98.00. Should today be the low, we may see a very sharp move beginning as early as Wednesday to the upside. The USD demise may be postponed. The Cycles Model infers a rally may dominate the USD actions until mid-June.
Bitcoin rose to 87772.39 this morning, extending its Master Cycle to day 266.00. While the Cycles may often be precise within a few days, occasionally extraneous events may speed up or postpone them within certain parameters. Today’s extension has as much to do with the fractal structure being completed as it has to do with the USD making a new low today.
Gold futures rose to 3435.90 this morning and may be approaching a new Master Cycle high at a possible round number resistance of 3500.00. Why is gold going higher in the absence of inflation? The reason may be political instability. Europe appears to be preparing for war. With that realization, banks and other institutions are buying gold, not for the appreciation, but for an asset that will survive a war since most currencies will default.