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.
10:24 am
BKX completed its Master Cycle at a retracement high and is due for a steep decline. A decline beneath the Head & Shoulders neckline at 99+.68 may set off an unanticipated panic decline lasting up to a month.
I am leaving for a long weekend in another state. Hopefully I will be back on Monday for more reports.
7:45 am
Good Morning!
SPX futures went lower in the overnight session to 5327.50. Should it remain above 5310.00, it has the ability to rise to a new corrective high. The fractal structure becomes complete above 5491.00, where multiple resistances lie. The SPX remains beneath the 2987 trendline, threatening the long-term uptrend. A breakdown beneath 4835.00 raises the threat of a decline to 3500.00. Meanwhile, retail investors are buying the dip while hedge funds and institutions are selling the ramp.
Today’s options chain shows Max Pain at 5350.00. Long gamma begins at 5445.00 while short gamma starts beneath 5300.00.
RealInvestmentAdvice comments, “We have good and bad news for investors who want to know whether the stock market will soar, stall, or plummet. First, the good news. This article presents the market path for what lies ahead. Unfortunately, the “right” path is among three likely scenarios.”
ZeroHedge reports, “It’s risk-off price action this morning, with US equity futures lower, rates rallying across the curve, macro credit opening softer, while the USD trades broadly lower. The two-day rally in US stocks fizzled amid mixed Trump signals on China tariffs as the president floated a fresh levy timeline while simultaneously denying easing efforts and Beijing called for full rollback of all US duties. As of 8:00am S&P futures slipped -0.3% as China maintained a defiant stance over tariffs imposed by Trump, but were off session lows as investors continue to live headline to headline; Nasdaq futures dropped 0.2% with all Mag7 names in the red; NVDA (-1.5%), TSLA (-1.6%), and AAPL (-1.2%) are leading the losses. With Trump reigniting tariff volatility, IBM warning on federal cuts and China denying trade talks entirely, the rotation out of US risk remains intact. Europe was mixed, Real Estate (+1.16%) and Autos (+0.71%) outperforming but Banks (-0.76%) and Travel (-0.69%) lagged. Overnight, China responded to the recent headlines regarding “US-China talk”: Beijing pointed out that “there are absolutely no negotiation on the economy and trade between China and the US and called to cancel all the unilateral measures on China. Meanwhile Trump downplayed the idea of millionaire tax rate, one that some Republicans sees as a way to pay for the economic package. Bond yields are lower and USD is weaker; 2-, 5-, 10-yr yields are 4.5bp, 4.8bp, 3.3bp lower. The dollar extended its decline (-0.56%), with gold climbing (+1.3%) as investors hedge against prolonged US policy risk. VIX is flat (+0.28%), MOVE dipped (-1.48%) and USYC2Y10 (+1.6%) suggesting caution is returning despite the bounce in crude (+0.74%) copper (+0.57%) and gold (+1.4%). Flows are risk-off: SPY -$1.98B, QQQ -$689M and IWM -$614M, while GLD picked up another +$643M and XLU +$109M. Looking ahead today, we have durable good orders, initial and jobless claims, existing home sales, as well as non-voter Kashkari speaking.”
VIX futures remain neutral this morning. Structurally, it may decline further near the 50-day Moving Average at 24.58. VIX is within the turn window for the Master Cycle. While early, the reversal may coincide with that of the SPX. The Cycles Model suggests a possible panic Cycle beginning next week.
The April 30 options chain shows Max Pain at 26.00. Short gamma is strongest between 20.00 and 25.00. Long gamma lies above 30.00 to 40.00. Sentioment favors a calmer market.
TNX rose above the 50-day Moving Average at 43.24 this morning, potentially resuming its uptrend. Yesterday’s low may have completed the Master Cycle on day 261. A continued rally above the 50-day indicates a buy signal for the 10-year yields. The next visible resistance lies at the Cycle Top at 48.03. The Cycles Model shows rising yields through the end of May.
USD futures are consolidating above the Cycle Bottom support at 98.84 after being launched from its Master Cycle low. It is on a buy signal. The lament of the crashing USD has been a bit overdone. The latest analysis calls for rising inflation and a weaker USD.
Gold futures are consolidating abive the trendline near 3250.00. A Cycle reversal has been made and confirmation lies beneath the trendline. Should it decline beneath the trendline, the Cycles Model suggests a decline lasting until mid-July. Gold’s time to own will come again, but the next two months may be punishing for longs.
Crude oil is correcting beneath the Cycle Bottom support. A rise above that suport at 62.85 reiterates the buy signal.