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.
8:00 am
Good Morning!
SPX futures may be consolidating beneath Friday’s high at 5528.11, with a weekend high at 5523.10 and a low of 5490.60. A break beneath Intermediate support at 5484.86 produces a sell signal. Meanwhile the DJIA made its high on Wednesday at 40376.11. The SPX exceeded its Fibonacci target at 5491.00 and proceeded to test the 1987 trendline which provides the ultimate resistance. The immediate Cycles view is that SPX may decline to mid-June with a series of panic events starting on Tuesday, if not sooner. The longer term Cycle view is that the decline may continue with high volatility to mid-May 2026. This is not a market in which to be long. However, certain trading desks are turning bullish.
Today’s options chain shows Max Pain at 5475.00. Long gamma begins at 5500..00 while short gamma may start beneath 5450.00.
ZeroHedge reports, “US equity futures are little changed, reversing earlier losses as much as 0.5%, as global markets are broadly in the green amid a burst of positive sentiment, which even pushed JPM’s recently bearish trading desk to turn tactically bullish this morning (more in a subsequent post). As of 8:00am ET, S&P and Nasdaq futures are down 0.1%, but well off session lows. Nvidia shares fell 1% in premarket after the Wall Street Journal reported China’s Huawei Technologies is getting ready to test a new and powerful artificial intelligence processor that the company hopes can replace some products made by Nvidia; other Mag7 names are mixed with Cyclicals/Semis under pressure and Defensives catching a bid. Europe’s Estoxx advanced 0.5% over early London session with gains led by info tech and consumer staples; Asian stocks were also broadly higher with Japan erasing all post-Liberation day losses. US equities are focused this week on the tech sector, with Microsoft, Apple, Meta and Amazon all reporting earnings. The week also includes the April US jobs report, due Friday. Bond yields are higher as the curve bear steepens and the USD starts the session stronger. This is a data-heavy week but today’s focus is on regional Fed activity but the key’s this week are NFP, JOLTS, ISM-Mfg, and 25Q1 metrics.”
VIX futures have risen to 26.02 this morning as it may be emerging from a Master Cycle low on Friday. The Cycles Model shows multiple panic rips to the upside starting this week. The upside trend may resume to the middle of June.
RealInvestmentAdvice observes, “Market Finds Some Hope
Last week, we discussed the issue with the spat between President Trump and the Federal Reserve chairman, Jerome Powell. As noted then:
“While the markets await the next Federal Reserve meeting, the uncertainty over monetary policy weighs on markets as much as the uncertainty about tariffs. This past week, the market reversed some of its gains from the massive “tariff reprieve” surge. With the MACD back on a buy signal and money flows turning positive, buyers are tepidly stepping back into the market. The 20-DMA continues to act as overhead resistance, defining the current downtrend. While there is undoubtedly a risk of another test of recent lows, which should be expected and why caution remains advisable, a break above the 20-DMA would lead to a rally to the 50-DMA. (Monday’s article addressed the “Death Cross” and what it means for investors.)“”
TNX is emerging from a Master Cycle low made on Friday. A buy signal for yields may be made above 42.88 with confirmation above the 50-day Moving Average at 43.14. Trending strength may return by the end of the week, according to the Cycles Model. A test and possible breakout of the Cycle Top at 48.04 is anticipated. Investors are questioning the long-held view that Treasuries are a safe haven in times of market distress. Most commentators believe that interest rates are political and can be manipulated. That view may come up against a hard wall as interest rates rise in a stagnating economy and a looming war.
On Wednesday last week Bitcoin made its Master Cycle high. Since then it has been consolidating beneath the high. A sell signal may be made with a decline beneath the mid-Cycle support at 91211.84. The Cycles Model calls for a decline to mid-June. There are multiple potential panic-down days starting mid-week. The retracement appears to be over.
USD futures are consolidating beneath the high made on Wednesday. It is on a buy signal above the Cycle Bottom support at 98.70. The USD appears capable of getting a double dose of energy on Wednesday which should wake up investors to the change in trend. Analysts are calling the USD low in April “Structural” because it has dipped beneath previous 2-year lows. On the contrary, it may be a false flag to turn sentiment in the wrong direction, providing fuel for a huge short-covering rally.
Today’s “spike rally” in gold today may offer hope to investors that the uptrend is still alive. However, the trend may have turned, leaving investors high and dry. A decline beneath the trendline at 3250.00 offers a sell signal with further confirmation beneath it. The Cycles Model tells us to prepare for a decline lasting until mid-July.